The Financial Express

No visible progress in offloading SoEs’ shares

Ministry seeks reports on latest status

| Updated: August 05, 2018 18:01:01

No visible progress in offloading SoEs’ shares

Offloading of shares of multiple state-owned enterprises (SoEs) still lies in limbo mainly due to procedural complexities, sources said.

Finance Minister AMA Muhith at a review meeting in August 2017 asked the authorities concerned to make the SoEs profitable and then offload their shares within the last fiscal year (FY).

But there is no development in this regard, they said.

The move is not progressing due to procedural complexities and the dilly-dallying attitude of the authorities concerned despite repeated reminders from government high-ups, officials said.

At a regular meeting on July 17 the finance ministry reviewed the latest status of offloading the shares of SoEs.

The finance later on July 30 asked 20 SoEs to send their latest statements under different heads within 15 days. Of the SoEs, some 12 were asked to inform Financial Institutions Division (FID) about the progress of appointment of consultants within the same time for share offloading according to an earlier decision of the finance minister, they added.

Besides, the rest of SoEs were asked to send initial/detailed progress reports on share offloading within two weeks, they mentioned.

"We are reminding the ministries concerned to expedite the process, and bring the SoEs, which are yet to offload their shares, in the capital market as early as possible," a high official of FID told the FE.

Then the finance ministry asked the SoEs to expedite the share-offloading process again and again. But there is no visible progress, he said.

Officials said FID took a decision to hold a yearly meeting on floatation of the SoEs' shares. Subsequently, a meeting was held in May 2014 to devise a time-bound action plan for it.

The authorities concerned missed their deadlines several times, although they pledged earlier for floating their shares, a senior official of Investment Corporation of Bangladesh (ICB) who is involved with the initiative told the FE.

The possibility of offloading the shares of the rest of SoEs is gradually fading away due to some procedural complexities of the authorities concerned. As a result, the government could not float the SoEs' shares in the capital market despite repeated suggestions from experts and investors, he said.

"The officials of FID are frequently corresponding with the SoEs to complete their preparations for offloading shares. But there is no significant progress yet," a senior official of FID said.

Presently, at least 20 SoEs are supposed to offload their stakes in the capital market.

Of the companies, Liquefied Petroleum Gas Ltd (LPGL), Bakhrabad Gas Transmission and Distribution Company, and Gas Transmission Company are now profitable entities.

They will decide to offload their shares after getting imported LNG as the companies are operating with low gas pressure, according to the FID minutes.

Bangladesh Gas Fields Company Ltd and Pashchimanchal Gas Company Ltd will take the next course of actions according to the decisions of the board of directors of the entities about offloading shares.

Some 75 per cent capital of Northwest Power Generation Company Ltd has been collected through loans. Most of its projects are being implemented now. So, the company will take required steps to offload shares after strengthening its financial health.

Besides, the capital of Electricity Generation Company of Bangladesh is less than Tk 100 million. For this, the entity could not take initiatives to offload shares in the stock market. It has taken steps to raise its capital.

The authority of Ashuganj Power Station Company Ltd (APSCL) will issue bond worth Tk 6.0 billion. The Bangladesh Securities and Exchange Commission (BSEC) has already given approval in this regard.

Jalalabad Gas Transmission and Distribution Company, Sylhet Gas Field Company, and Rupantarita Prakritik Gas Company Ltd (RPGCL) are working to appoint consultants according to the instructions of the finance minister.

Teletalk Bangladesh is a loss-making entity. A work plan has been submitted to the board of directors of the agency. The board has set up a committee and asked it to submit a report within a month.

After receiving the report, the state-run mobile operator will inform the FID about offloading its shares according to the decision of the board of directors.

Bangladesh Telecommunications Company Ltd (BTCL) is now in the process of offloading its shares.

Bangladesh Cable Industries Ltd will take steps to offload its shares, but not right now. After implementing a project titled 'Electrical Overhead Conductor and Service Drop Wire Cable Plant', it will decide to offload shares considering commercial production, sale and profit.

Bangladesh Telephone Shilpa Sangstha (BTSS) is now operating at a loss. So, the ministry instructed the entity to take help from BSEC and ICB in offloading its shares in the capital market within 30 days.

The authorities concerned will take the next course of actions to make Karnafuli Paper Mills, Chhatak Cement Factory, Bangladesh Insulator and Sanitary Ware Factory Ltd, Chittagong Dry Dock Ltd and Pragati Industries Ltd (PIL) profitable entities.

Power Grid Company of Bangladesh (PGCB) and Titas Gas Transmission and Distribution Company (TGTDC) offloaded 23.75 per cent and 25 per cent of their shares respectively in the capital market.

Offloading more shares of the two companies is being pursued, a joint secretary of the finance ministry said.

[email protected]

Share if you like