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ADN Telecom is going to acquire another 40 per cent stake in ADN International Gateway (AIG), a broadband service provider, at the expense of Tk 11.34 million.
ADN Telecom is a publicly-traded IT and telecommunication services provider while ADN International Gateway is a private limited company holding an International Internet Gateway (IIG) license issued by the Bangladesh Telecommunication Regulatory Commission (BTRC).
ADN Telecom and ADN International Gateway are two major concerns of the AND Group. Earlier in 2021, ADN Telecom acquired 40 per cent stake in ADN International Gateway.
This vertical acquisition will increase ADN Telecom's current shareholding to 80 per cent in ADN International Gateway, making it a subsidiary of ADN Telecom, said the company in a stock exchange filing on Tuesday.
Company secretary Md Monir Hossain said the proposed vertical acquisition would lead to a further growth of both the companies, strengthening their overall position in the market.
LATEST INVESTMENTS
ADN Telecom acquired a 10 per cent stake in Shohoj in June this year by investing Tk 120 million as part of its business expansion.
The company secretary earlier said ADN Telecom invested in Shohoj, having been encouraged by its good business potential.
Shohoj launched as an online ticketing platform in Bangladesh in 2014 under the brand name "Shohoz". It holds the number one position in terms of the usage of its ticketing software by long-distance bus operators as well as use of its web-based ticketing systems.
On top of that, "Shohoz" exclusively manages the online integrated ticketing platform of Bangladesh Railway.
In July last year, ADN Telecom also acquired 60 per cent shares of SOS Developments, a fire security service provider, at a cost of Tk 20 million for 10 years.
In May this year, the company decided to construct a 13-storey commercial building and set up a data centre there in the capital's Badda.
Last month, the company decided to purchase land beside company's existing 14.13 decimals of land from its related party/associate company under the common directorship worth Tk 115.68 million, excluding the costs for registration and other related expenses, in the capital's Badda for construction of a multistoried corporate building.
In September this year, the company also decided to acquire a 235-decimal plot of land in Gazipur at a cost of Tk 23 million for future business expansion.
FIRST QUARTER PERFORMANCE
Meanwhile, after a record annual profit for FY23, ADN Telecom's consolidated first quarter (July-Sept) profit dropped 32 per cent year-on-year to Tk 44.42 million.
Revenue also declined 10 per cent to Tk 298.68 million in July-September this year, according to its quarterly financial statements published on Tuesday.
The company explained that revenue was higher in the same quarter a year ago due to a payment from its client Bangladesh Police, but the service was discontinued.
It said the revenue decline was temporary. The cost of operation was high affecting the quarterly earnings.
Its total operating expenses rose nearly 12 per cent to Tk 75.33 million while finance expenses more than doubled year-on-year to Tk 6.87 million in the July-September quarter.
The income is expected to get a boost soon as the investments made will bear fruits, said the company in its earnings note.
Meanwhile, following the news on the profit decline, the stock plunged 5.13 per cent to Tk 112.90 on Tuesday.