Power Grid gets BSEC nod to issue Tk1,529cr preference shares to govt
It has previously issued preference shares to the government worth Tk10,146cr, which is 11 times higher than its ordinary share capital
Highlights
- BSEC gave its consent to issue 152.92 crore preference shares at a face value of Tk10 each.
- PGCB received a substantial amount of funds from the government in FY2024–25, against which it will now issue preference shares.
- Power Grid had previously issued preference shares to the government worth Tk10,146 crore in several tranches.
- PGCB's outstanding share money deposits stood at Tk3,376 crore at the end of March 2026.
- In the first nine months of FY2025–26, PGCB posted revenue of Tk2,386 crore and a profit of Tk570 crore.
- PGCB's shares closed at Tk33.20 yesterday, up 3.11% from the previous session.
In a move to convert its share money deposits into equity, Power Grid Company Bangladesh (PGCB), a state-owned power transmission company, is now set to issue preference shares to the government worth Tk1,529 crore.
In several tranches, Power Grid had already issued preference shares to the government worth Tk10,146 crore against funds received from the government for development projects.
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Its balance sheet as of March 2026 shows that its preference share capital is 11 times higher than its ordinary share capital, with existing ordinary paid-up capital standing at Tk913.80 crore.
The Bangladesh Securities and Exchange Commission (BSEC) gave its consent on 20 May to issue 152.92 crore irredeemable and non-cumulative preference shares at a face value of Tk10 each.
The preference shares will be issued in favour of the Secretary, Power Division, Ministry of Power, Energy and Mineral Resources, against share money deposits for the year ended June 2025.
According to company sources, Power Grid received a substantial amount of funds from the government in the FY2024–25, against which it will now issue preference shares worth Tk1,529 crore.
Under the government financing structure, 60% of disbursed funds is treated as equity and the remainder as loans, with the equity portion recorded as share money deposits.
At the end of March 2026, PGCB's outstanding share money deposits stood at Tk3,376 crore.
The shares issuance follows to comply with a notification issued by the Financial Reporting Council (FRC). The accounting regulator FRC directive, issued in 2020, said share money deposits must be converted into the company's capital within six months.
It also directed companies to include share money deposits when calculating earnings per share and dividends as soon as the funds are deposited, even before securitisation.
In line with the directive to comply, Power Grid gradually issued preference shares in favor of the government rather than issuing ordinary shares.
Preference shares are a class of shares where dividends are paid to holders before any distribution to ordinary shareholders. The government will accordingly receive dividends on the preference shares at a fixed rate before any dividend is declared for general shareholders.
The dividend rate for the government on the preference shares will be determined as a percentage of total capital, calculated as 25% of the assumed share of net profit after tax attributable to the preference shareholders.
Power Grid Company secretary Md Jahangir Azad said "The preference share issuance is a continuous process as we are instructed to issue shares against share money deposits after the end of the fiscal year."
"We are issuing shares for the government that was taken for the 2024-25 fiscal year. Every year, we will issue shares to the government that will be taken each year," he added.
Earlier explaining the dividend mechanism to The Business Standard, Power Grid Company secretary Md Jahangir Azad said, "Suppose preference shares account for 25% of the company's paid-up capital. If the company makes a profit of Tk100 in a financial year, the entitlement of the preference shares would be Tk25 from that profit. The government would then receive a 25% dividend on this Tk25 allocated to the preference shares."
In the first nine months of the current fiscal year, Power Grid reported that its revenue slightly grew to Tk2,386 crore, and made a profit of Tk570 crore.
At the same time of the previous fiscal year, its revenue was Tk2,218 crore and incurred a loss of Tk31 crore due to foreign currency fluctuation as it has to pay its foreign loans in foreign currency. The company's shares closed at Tk33.20 yesterday, up 3.11% from the previous session.
