Robi sets 2 tax-related conditions to get listed

Staff Correspondent | Published: 18:17, Feb 22,2020 | Updated: 22:30, Feb 22,2020

 
 

Robi chief executive officer Mahtab Uddin Ahmed speaks at a press briefing on the company’s business update at its head office in the capital on Saturday. Robi chief corporate and regulatory officer Shahed Alam and other high officials were also present. — New Age photo

Mobile phone operator Robi Axiata Limited has set two conditions — cuts in turnover tax and corporate tax — for the government to offload its shares worth Tk 524 crore on the country’s capital market.

Robi officials unveiled the conditions at a press briefing on its business update held at its head office in the city, saying that non-implementation or delay in implementation of the two conditions might influence  the operator’s decision to get enlisted.

Robi chief executive officer Mahtab Uddin Ahmed said that the parent company of Robi, Malaysia-based Axiata Group, set the conditions under which turnover tax should be reduced to 0.75 per cent from the existing 2 per cent and corporate tax should be cut by 10 percentage points if Robi was to get listed on the capital market.

The tax benefits should be given for ten years.

Robi has already obtained approval from its parent company Axiata to offload 10 per cent of the company shares worth Tk 523.79 crore and the two conditions were set by Axiata as a precondition for floating the shares, he said.

Both the listing process and implementation of the demands by the government would continue simultaneously, the Robi CEO said.

The finance ministry and the Bangladesh Securities and Exchange Commission have responded positively in regards to the demands, Mahtab said.

Before taking approval from the board, Robi already received the no objection certificate from the Bangladesh Telecommunication Regulatory Commission, he mentioned, adding that the entity was yet to submit the IPO application to the BSEC.

The company appointed IDLC Investments as its issue manager.

If the government fulfilled the conditions, Mahtab hoped that the initial public offering of the company would be floated by this year.

Robi posted a Tk 17-crore profit after taxes in 2019 against Tk 215 crore a year ago, Mahtab mentioned at the briefing on Robi’s financial situation.

He mentioned that the entity had been struggling due to the high taxation burden on the mobile phone companies and the effective tax rate was 96 per cent in 2019, making it difficult for the telecom companies to generate profit.

Robi chief corporate and regulatory officer Shahed Alam said that the shareholders would also struggle if the government refrained from addressing the proposals which had been placed by Robi.

Under the move to enlist its shares on the country’s stock market, Robi would float a total of 52.379 crore shares.

Of the shares, 38.77 crore shares would be issued to retail and institutional investors, and another 13.61 crore shares would be issued to the eligible directors and employees of Robi under the employee share purchase plan (ESPP) in conjunction with the proposed listing.

Each of the shares of the telecom operator would be issued at face value of Tk 10 under the fixed price method without any premium.

With the issuance of new shares worth Tk 523.79 crore, the paid-up capital of the entity would stand at Tk 5,237.9 crore from the existing Tk 4,714.1 crore.

Robi officials declined to comment on the earning per share of the company.

But as per the existing paid-up capital and profit after tax, the company’s EPS stands at Tk 0.036.

Asked whether the profitability of the entity would be lucrative enough for the investors to go for the IPO, Mahtab said, ‘I don’t want to make any prediction and influence anyone.’

He, however, said that the operator was confident.

Replying to another question, Mahtab said that the shares of Robi at face value under the fixed price would be very lucrative to the stock market investors.

The Robi CEO also said, ‘The profitability of the company would not remain stuck here if the government supports us.’

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