New IPO Notes

United Power Generation & Distribution Co. Ltd.

Company Overview

United Power Generation & Distribution Company Ltd.’s principal activity is to generate electricity by two gas fired power plants, one at DEPZ with 88 MW capacity and the other at CEPZ with 72 MW capacity and to sell generated electricity to the export processing industries located inside DEPZ and CEPZ with the provision of selling surplus power outside the Export Processing Zones (EPZs) after fulfilling their requirement. The company currently supplies excess electricity to REB, BPDB and some other private entities.

IPO Overview

United Power Generation & Distribution Company Ltd. (UPGDCL) has offered 33 mn shares to public through IPO of which 13.2 mn shares were sub-scribed by Eligible Institutional Investors (EII) and 19.8 mn shares were sub-scribed by general public. The company has raised a total amount of BDT 2376 mn through IPO. Of the IPO proceeds, BDT 1490 mn will be used for full redemption of preference share, BDT 792 mn for repayment of long-term loan, BDT 28 mn for working capital and 66 mn for IPO expenses.

Key Facts

  • The company increased its power generation capacity from 85 MW to 160 MW in 2013. The expanded capacity has become fully available from March’14.

  • The company currently (CY2014) sells around 40% of DEPZ and 20% of CEPZ’s electricity to REB and BPDB at very low rate due to low demand from EPZs. Increase in demand from BEPZA will improve the company’s profit margins.

  • Due to repayment of debt securities, the company will save around BDT 282 mn as financial expenses.

  • The company has installed 5 heat recovery boiler to produce steam. The commercial sales of steam is expected to start in Q3CY15. It will add BDT 150 mn of yearly net profit.

  • The company enjoys income tax exemption for 15 years, starting from 2008.