Shasha Denims to sell 55MW power plant
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Shasha Denims to sell 55MW power plant

Energy

Ahsan Habib Tuhin
16 June, 2020, 10:45 pm
Last modified: 17 June, 2020, 02:04 pm

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Shasha Denims to sell 55MW power plant

The three-time National Export Trophy (Gold) winner has been experiencing an uphill struggle with production costs

Ahsan Habib Tuhin
16 June, 2020, 10:45 pm
Last modified: 17 June, 2020, 02:04 pm
Shasha Denims to sell 55MW power plant

Shasha Denims Limited wants to sell its 55-megawatt (MW) power plant which has remained closed since July 2019 after the expiration of its power purchase agreement with the government.

Energis Power Corporation Ltd, a subsidiary company of Shasha Denims, is the operator of the plant located in Shikalbaha, Chattogram.

Commissioned on January 10, 2010, the plant started commercial operations from May 6 of the same year and supplied power to the national grid.

Energis signed a Power Purchase Agreement (PPA) with the Bangladesh Power Development Board (BPDB) on December 28, 2008 for a three-year term to provide 55MW of net electricity. This agreement was subsequently renewed on May 12, 2014 for another five years.

Seeking anonymity, an official of Shasha Denims told The Business Standard, "We filed an application with BPDB for extension of the power purchase agreement last year. But they have not considered the application yet. Now we have no prospect of profiting from this plant. So, the company is trying to sell it."

Shasha Denims Ltd, a three-time National Export Trophy (Gold) winner, has been experiencing an uphill struggle with production costs.  

The company reported that its net profit had dropped by 92 percent in the third quarter of the current financial year (July 2019 - June 2020), which was published on Tuesday at the Dhaka Stock Exchange (DSE). During this period, its earnings per share (EPS) were Tk0.13.

Besides, in the three quarters or first nine months of the current financial year, its earnings per share decreased by 66 percent.

"The company incurred losses worth Tk10.32 crore due to shutdown of the power plant. The company also did not make any capital gains during the three quarters," the official said.

"Besides, the cost of fabrics also increased production costs. As a result, net profit dropped significantly."

Shasha Denims has been listed with the DSE since 2015. Its shares closed at Tk21.60 at the premier bourse on Tuesday.    

Shasha Denims' highest share price rose to Tk48.30 in the last one year.

The company gave 5 percent cash and 5 percent stock dividends to its shareholders in the last financial year. 

In the 2017-18 financial year, Shasha gave 15 percent cash and 7 percent stock dividends. Before that, it disbursed 25 percent cash and 6 percent stock dividends in the 2016-17 financial year.

Shasha Denims' paid-up capital is Tk134.32 crore.

Sponsors and directors own 37.57 percent shares of the company, while institutional, foreign and general investors respectively own 19.26 percent, 1.12 percent and 42.04 percent shares.

Bangladesh / Top News

Shasha Denims / Power Plant

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