The EGM will be held on November 19, 2020 in order to get approval from the shareholders of Baraka Power
The board of directors of Baraka Power Limited has decided to hold an extraordinary general meeting (EGM) regarding the listing of its subsidiary company, Baraka Patenga Power Limited, in the stock market through initial public offering (IPO).
The EGM will be held on November 19, 2020 in order to secure approval from the shareholders of Baraka Power. The record date is set for October 22, stated the company disclosure on the Dhaka Stock Exchange (DSE) website on Thursday.
Baraka Patenga intends to raise Tk225 crore by selling its shares through IPO under the book-building method.
Last year, the subsidiary company sent its IPO application to the Bangladesh Securities and Exchange Commission (BSEC).
But the securities regulator has recently asked for a revised application.
Md Monirul Islam, chief financial officer of Baraka Patenga told The Business Standard, "Baraka Power is the parent company of Baraka Patenga holding 51% shares of the latter. Earlier, we submitted the IPO proposal for Baraka Patenga with the approval from the board of directors of the parent company."
But following the public issue rules as a listed company, Baraka Power needs the approval of its shareholders to float IPO shares of its subsidiary company.
"Since we did not get approval from the shareholders of our parent company, the commission told us to comply with these rules and resubmit the proposal," he added.
Of its IPO proceeds, Baraka Patenga wants to spend Tk144.34 crore on equity investments in its subsidiary companies - Karnaphuli Power Limited and Baraka Shikalbaha Power Limited - having power plants of capacities 105MW and 110MW respectively.
The company will spend Tk74.87 crore of its IPO proceeds to pay back bank loans.
LankaBangla Investments Ltd will be the issue manager of the IPO of Baraka Patenga.
Baraka Patenga was incorporated as a private limited company in 2011. Its main business is to set up power plants for power generation and supply.
The company has a 50MW power plant located at Patenga, Chattogram which started commercial operations on May 4, 2014.
Baraka Patenga posted revenue of Tk342 crore and net profit of Tk30 crore for the 2018-19 financial year.