Doreen Power Generations and Systems Limited is to make an investment in the country’s power sector to the tune of Tk160 crore; of this total investment amount, the company is set to invest Tk85 crore, which will come from its stock dividends and retained earnings from the accounting year 2018-19.
Chandpur Power Generation Limited, a subsidiary of Doreen Power, will invest the amount for establishing a 115-megawatt (MW) power plant in Chandpur.
Doreen Power has 99.90 percent share of the Chandpur power plant.
Masudur Rahman Bhuiyan, company secretary at Doreen Power, told The Business Standard that the power plant is being set up in Chandpur at a cost of Tk680 crore.
“Of the amount, Tk520 crore will come in the form of syndicated loans under the supervision of lead arranger Dhaka Bank, while the rest of the amount will come from the Doreen Power’s own fund,” he said, adding that the latest investment in the plant will be made from the firm’s retained earnings and stock dividend, accrued from the last accounting year.
He further said, the construction of the plant will be completed next year.
Doreen Power, at its recent board meeting, recommended 17 percent cash and 13 percent stock dividend for its shareholders from its earnings in 2018-19 fiscal (Directors and sponsors of the company will not take any cash dividend).
During the period, the company made a net profit of Tk92 crore, its earning per share being Tk7.91. As the company issues stock dividend, Tk15 crore will be added to its paid-up capital.
Besides, the Doreen Power’s retained earnings stood at Tk70 crore, after deducting the dividend from its profit
According to DSE data, the company’s reserve and surplus stands at Tk273 crore as of June 30, 2018.
Earlier on January 18, 2018, the Chandpur Power signed a 15-year power purchase agreement with the Bangladesh Power Development Board.
As per the agreement, the power plant was scheduled to start commercial production on July 16, 2019.
But, the production could not be started as per the schedule due to delay in import of necessary machinery for setting up the plant, officials at Doreen Power said.
They, however, expressed their hope that the plant will be able to start on its commercial production in 2020.
According to the sources at Doreen Power, once in commercial operation, the Chandpur power plant will add Tk600 crore to Tk700 crore to the Doreen Power’s annual revenue.
As a result, the company’s profit will also increase by about Tk80 crore per annum.
At present, Doreen Power supplies the national grid with 176-megawatt electricity.