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IPO of Ashuganj Power's bond may face cancellation

  • Published at 07:29 pm October 12th, 2019
Ashuganj Power

The company has so far been able to raise Tk35 crore out of Tk100 crore thorough IPO, which mean 35% of the total the total amount

The initial public offering (IPO) of state-owned Ashuganj Power Station Company Ltd's bonds may face cancellation for under-subscription. 

According to data from different sources, including the issue manager, the company has so far been able to raise Tk35 crore out of Tk100 crore thorough IPO, which mean 35% of the total the total amount.    

As per public issue rules of the Bangladesh Securities and Exchange Commission (BSEC), minimum subscription requirement for IPO is 65%. 

The securities market regulator approved Ashuganj Power Station’s IPO on July 2. The subscription date was September 23 to October 6 this year.

The bonds are non-convertible, fully redeemable, and coupon bearing. Each of the 2,00,000 bonds with a seven-year term is priced at Tk5,000. The annual interests from the bonds is minimum 8.5% and maximum 10.5%, payable every six months.

Recently, the company issued bonds worth Tk500 crore through private placement among state-owned banks and financial institutions. Tk100 crore  more was scheduled to be collected from public subscription that would let the bond be a tradable one in the stock exchanges. 

The state-run company will use the proceeds for land development, purchase of primary fuel and transportation. Ashuganj Power, the largest power plant of Bangladesh, now generates 1,690 Megawatt. 

When asked about the matter, BSEC Executive Director and spokesperson Md Saifur Rahman told Dhaka Tribune: "We have not yet come to know about the issue. Once we are informed we will see what can be done in this regard." 

The company secretary of Ashuganj Power Mohammad Abul Mansur told Dhaka Tribune: "We did not get the expected response because of its being a new product. We will sit with the BSEC  on   Sunday. We hope for a good solution.”

According to the financial statement ended on June 30, 2017, the company's net asset value (NAV) per share stood at Tk265.96, while the weighted average of earnings per share (EPS) was Tk10.63. 

ICB Capital Management and BRAC EPL Investments are the issue managers of the bond to be issued by Ashuganj Power Station Company. The ICB Capital Management is also the trustee of the bond.

This power station plays a significant role in the national economic development by meeting more than 12% of the total demand for electricity in the country. 

Ashuganj Power Station is located near to the Titas Gas field and on the bank of the river Meghna. As a part of the Power Sector Development and Reform Program of the government, Ashuganj Power Station was incorporated under the Companies Act 1994 on 28 June 2000.