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Summit Power subsidiaries under merger plan

  • Published at 06:05 pm March 16th, 2016

The prposed merger is subject to approval of the High Court and other regulatory authorities, according to the company

Summit Power Limited (SPL), a subsidiary of Summit Group, yesterday said it is mulling merger of its three subsidiaries with itself.

The country’s first private power generation firm proposed to acquire shares of its three power generation subsidiaries—Summit Purbanchol Power Company Limited (SPPCL), Summit Uttranchol Power Company Limited (SUPCL) and Summit Narayanganj Power Company Limited (SNPCL). 

In a statement, the company said it has considered the proposal of merger of SPCCL, SUPCL and SNPCL, but it is subject to approval of the High Court and other regulatory authorities.

Established in 1997, SPL, a listed company, operates 11 power plants at different locations across the country, having a total capacity of 317 mega watt (mw) electricity.

Under the SPPCL projects, two power plants—Jangalia Power and Rupganj Power— are producing 66mw under 15-year power purchase agreement with the government.

Under the SUPCL projects, two power plants – Ullapara Power and Maona Power Plant –  are generating 44mw electricity under the same agreement.

Under the SNPCL, Madanganj Power Plant with capacity of 102mw electricity production was set up to provide electricity to Bangladesh Power Development Board under Build, Own and Operate basis using Heavy Fuel Oil. 

To acquire the subsidiaries, it proposed to exchange its 1.309 shares for one share of SPPCL, 1.668 shares for one share of SUPCL and 1.475 shares for one share of SNPCL.

Share value will work out for non-listed subsidiaries, SUPCL and SNPCL, at their weighted average of net asset value as of 2015 and average market price for six months to December 31, 2015.

For listed subsidiary SPPCL, share value will be fixed on the basis of share value at its weighted average of net asset value as of 2015.

However, investors took the merger news negatively as share price of SPL fell steeply about 8% and SPPCL 8.4% on the Dhaka Stock Exchange on the same day.