Govt starts offloading 10pc more shares of DESCO

Staff Correspondent | Published: 23:33, Nov 06,2016

 
 

The government has decided to resume offloading shares of state-owned enterprises with offloading 10 per cent more shares of Dhaka Electric Supply Company, which is listed with the two bourses.
The state-run Bangladesh Power Development Board, the major shareholder of DESCO, on Sunday announced that as per the government order it would offload 10 per cent shares of DESCO from its possession to the capital market.
As present, out of DESCO’s 39,75,69,804 shares, BPDB holds 73.72 per cent or 29,31,04,259 shares while institutional investors hold 17.69 per cent, foreign investors 0.57 per cent and retail investors 6.74 per cent.
So, PDB will offload around 2.93 crore more shares of DESCO.
An official of Investment Corporation of Bangladesh, which deals with the shares of SoEs, the decision of offloading more shares of a number of SoEs, including DESCO, had been taken in 2011.
But the government could not offload the shares because of persistent dull situation in the market following the crash in 2011 and lack of enthusiasm among the companies.
‘The government now thinks it is the right time to offload shares of SoEs as the market has stabilised somewhat in recent times,’ he said.
Government’s instruction was to float shares within June 30 this year but delayed due to some procedural requirements, the official said.
He also said that the ICB Securities Trading Company, a subsidiary of ICB, will implement the government instruction to offload DESCO shares.
He said that after DESCO’s offloading, the government might offload 10 per cent more shares of Titas Gas Transmission and Distribution Company.
DESCO, a Tk 397.56-crore entity, was enlisted with the stock exchanges in 2006 floating its 25 per cent shares.
With the current price of Tk 53.70, the BPDB is expected to net in around Tk 157 crores by offlading 2.93 crore DESCO shares.
BPDB, however, did not announce the timeframe for share sales.
Typically, a corporate sponsor announces a 30-day timeframe for selling shares.
In 2005, the government had selected 26 companies including Unilever and Aventis in which it has stakes for offloading certain portion of the shares in the capital market.
It wanted to bring quality securities into the country’s stock market to meet the longstanding demand of the small investors.
But the process of further offloading of shares by the companies and others was hampered due to the worst ever share market collapse in 2010-11. Finance minister AMA Muhith held a meeting to review the decision last time in 2011.
The government owns 39.1 per cent and 45.36 per cent shares in Unilever and Aventis respectively.
The SoEs include Bangladesh Telecommunications Company Ltd (BTCL), Bangladesh Shipping Corporation, Bangabandhu Bridge, Bakhrabad Gas Systems Ltd, Sylhet Gas Fields Ltd, Gas Transmission Co Ltd, Bangladesh Services Ltd (holding company of Dhaka Sheraton Hotel) and Essential Drugs Co Ltd. 

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