Titas Gas Transmission Company Limited has received instructions to issue preference shares to the government against its Tk257.98 crore share money deposit. The decision was made during a meeting involving officials from the finance ministry, Titas, and the Financial Reporting Council (FRC). This move aims to provide the struggling company with some breathing space.
The proposed conditions state that the government will receive higher dividends from the preference shares if Titas generates more profits. In case of annual losses, no dividends will be given. These irredeemable non-cumulative preference shares do not increase the company’s paid-up capital and will remain in perpetuity. Titas will not be required to pay any unpaid preference share dividends from previous years due to their non-cumulative nature.
The committee has also formulated guidelines regarding the issuance of preference shares and their dividends. Titas’ gross profit margin has been narrowing, and it incurred losses for the first time in the January-March quarter of 2023. The government currently holds 75% of ordinary shares in Titas Gas.
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