United Ashuganj Energy Ltd has declared cash dividends of Tk176.19 crore – Tk4.40 per share – for fiscal 2020-21.
The company is owned by United Energy Limited, which is a subsidiary of United Power Generation and Distribution Limited.
As per the ownership, United Power, which is listed on the capital market, will receive Tk161.29 crore from the declared dividend.
United Ashuganj operates a 195MW gas-fired plant established under a public-private partnership model.
United Power had earlier received Tk1,336 crore as interim dividend from United Energy for the first nine months of FY21.
At the beginning of fiscal 2019-20, United Power acquired United Energy's shares for a total of Tk2.97 lakh only.
Moinuddin Hasan Rashid, managing director of United Power, had previously told The Business Standard that the acquisition of United Energy is a gift to the minority shareholders of the listed company from its sponsors.
United Energy itself operates a 53MW gas-fired quick rental power plant at Ashuganj which is looking at power selling contract renewal with the government following its decade of service. The company has another 28MW gas-fired independent power plant in Sylhet.
United Power, which itself operates an 86MW commercial independent power plant at Dhaka EPZ and another 72MW one at CEPZ, reported Tk859 crore in net profit over the first nine months of the last fiscal year.
As the lone commercial independent power plant, United Power has the freedom to sell power to export-oriented factories and other nearby clients at the two export processing zones in Dhaka and Chattogram, and the clients usually pay much higher prices for the high quality and uninterrupted power they get.
Impact on EPS
The incoming cash is United Power's dividend income and will boost its earnings per share (EPS) on a solo basis.
However, since the amount is out of the subsidiaries' current profits and retained earnings and those are already in the consolidated financial statements of the listed company, the dividend income will not be added to the consolidated profit and loss account and it will not increase the consolidated EPS, explained United Power's Company Secretary Badrul H Khan, who is a chartered accountant.