The 10-year agreement that Summit Power signed with Bangladesh Power Development Board (BPDB) to sell power from its Narayanganj power plant unit 1 expired on 31 March.
The company said in its disclosure published on the websites of both stock exchanges, that it had received a BPDB letter. As per the letter, the 102MW Narayanganj unit was completely shut down on 1 April.
The disclosure also said BPDB had filed a petition with the Appellate Division of the Supreme Court in this regard.
The court ordered that "the contract between the parties shall be deemed to have been extended till all litigation is over."
Summit declined to comment as the matter is sub judice, but said they had already applied for an extension of the agreement for another five years.
According to the company's annual financial statement, the Narayanganj plant started operation on 1 April 2011 for five years. In 2016, BPDB extended the deal for another five years, which expired on 31 March.
In 10 years, the company earned Tk1,943 crore from the plant.
The agreements of two more of the company's power plants – 24.3MW Madhobdi power plant unit 2, and 13.5MW Chandina power plant unit 2 –will expire at the end of this year.
Summit Power and its subsidiaries at present operate 15 power plants with a total generation capacity of 976MW. It also has a 17.64% equity in Khulna Power Company and 30% in Summit Meghnaghat Power Company.
All these plants have delivered approximately 2,675 million kWh to the national grid.
The company's Chairman, Aziz Khan, said in the 2019-20 annual report to shareholders, that the 300MW Summit Gazipur II Power Limited, a new plant under construction, secured $140 million from foreign commercial lenders, in long-term, low-cost financing.
In the last fiscal year, the company paid a 35% cash dividend to shareholders. That year, its revenue fell by 21% to Tk2,403 crore due to the Covid-19 pandemic.
In the first half of this fiscal year, the company made a strong recovery and posted a 57% growth in revenue, amounting to Tk2,027 crore.
During this period, its net profit fell by 2% to Tk447.54 crore, due to an increase in power production costs.
Summit Power got listed on the stock exchanges in 2005.
Its share price rose by 4.63% at the Dhaka Stock Exchange on Monday and the closing price of each share was Tk42.90.
Of the total shares, sponsors and directors hold 63.21%, institutional investors 19.69%, foreign investors 3.65%, and general investors 13.45%.