The initial public offering (IPO) subscription of Baraka Patenga Power will begin on June 13, aiming to raise Tk 2.25 billion under the book-building method.
The power generation company’s subscription through electronic subscription system (ESS) will be continued till June 17, according to its abridged prospectus published on Tuesday.
Baraka Patenga is the second company, after Sonali Life Insurance, which IPO shares will be allocated on the newly introduced pro-rata basis instead of lottery system.
The IPO share distribution on pro-rata basis system allows every applicant to get shares which came into effect on April 1.
The Bangladesh Securities and Exchange Commission (BSEC) allowed the Baraka Patenga Power to explore the cut-off price of its shares through eligible investors’ bidding and IPO proposal on January 5.
Earlier, the company completed electronic bidding and explored its cut- off price of shares - a requirement for going public under the book building method.
The cut-off price of shares of Baraka Patenga Power has been fixed at Tk 32 each through electronic bidding by eligible investors held between February 22 and February 25.
The general investors will get its IPO shares at Tk 29 each, a 10 per cent discount on the cut-off price, as per the book-building method.
Baraka Patenga Power will raise Tk 2.25 billion from the capital market under the book-building method by issuing a total of 73,770,488 ordinary shares.
Of the total shares, 36,885,288 shares are reserved for eligible investors (EIs) at their own bidding price while remaining 36,885,200 shares will be opened for general investors, including non-resident Bangladeshis for IPO, at a 10 per cent discount on the cut-off price.
Of the IPO proceeds, more than Tk 1.44 billion will be invested in two of its subsidiaries--Karnaphuli Power and Shikalbaha Power. Partial amount will be used to repay long-term bank loans and bear the expenses of the IPO process.
According to the audited financial statement as of June 30, 2020, the company’s consolidated earnings per share (EPS) were Tk 4.37 and separate Tk 1.84, consolidated net asset value per share Tk 23 without re-evaluated reserve and separate Tk 20.98.
Besides, the company’s weighted average consolidated earnings per share for the last five years were Tk 3.30 and separate Tk 2.82.
Lanka Bangla Investment is the issue manager for the company’s IPO process.
As per the BSEC directive, the company can declare only cash dividends for the next five years from the date of issuance of the consent letter of its IPO. Also, the company has to hold 51 per cent stakes in its two subsidiaries all the time.
Baraka Power, the parent company of Baraka Patenga Power, is already listed on the bourses since 2011.