Bangladesh Power Development Board (BPDB) is going to transfer all of its 67% stake in Dhaka Electric Supply Company (Desco) Ltd to Dhaka Power Distribution Company Ltd, a younger sibling of the listed power distribution company.
"As per government order, BPDB is transferring the entire Desco stake," said Kazi Ashraful Hoque, BPDB's finance and accounts controller.
The transfer process has already been initiated, he told The Business Standard.
Desco informed its shareholders that the company's sponsor, BPDB, owns nearly 26.38 crore of its 39.76 crore paid-up shares with a face value of Tk10 each.
The entire stake transfer is to take place outside the stock exchange's trading system with the approval of the Bangladesh Securities and Exchange Commission (BSEC).
Both Desco and DPDC are spin offs of the now defunct Dhaka Electric Supply Authority (Desa).
Desa, an autonomous body, was formed in the early 1990s to take over the power distribution network of Dhaka city and some surrounding areas, from the then Power Development Board (PDB).
As the government preferred a company structure instead of autonomous bodies, ultimately Desa handed over all of its assets and liabilities to two state-owned companies – Desco and DPDC.
Desco operates in the northern part of Dhaka while DPDC serves the southern part of the city.
After Desco, DPDC took over the remaining everything from Desa and began commercial operation in mid-2008 to abolish its ancestor Desa.
Desco, listed in 2006, now has its paid-up capital of nearly Tk400 crore.