Written by The Banking Post
Titas Gas Transmission and Distribution Company has received approval to issue nearly 283 million preference shares to the government, converting long-standing share money deposits into formal equity instruments.
The company will issue irredeemable, non-cumulative preference shares worth Tk 2.83 billion, in line with a regulatory directive to regularise such funds and ensure returns on government investments.
Preference shares entitle holders to dividends before ordinary shareholders, but in this case, unpaid dividends will not accumulate. Officials said this structure was chosen to avoid diluting existing shareholders’ ownership.
The government has injected funds into the company over decades as share money deposits—payments made against shares yet to be issued. The latest move will convert deposits recorded up to June 2023, although about Tk 690 million remains to be adjusted.
The initiative follows a 2020 directive from the Financial Reporting Council, which asked state-owned firms to convert such deposits into equity to improve financial transparency and accountability.
While the issuance will not increase ordinary share capital, it will add fixed dividend obligations, giving the government priority in profit distribution and potentially reducing returns for common shareholders.
Despite the development, Titas Gas shares edged up 0.60% to Tk 17 on the Dhaka Stock Exchange on Monday.
The company, once a consistent profit-maker, has faced financial strain in recent years due to high system losses and tax burdens, reporting cumulative losses of nearly Tk 17 billion between FY23 and FY25.
However, recent performance shows signs of recovery. Losses narrowed by 45% year-on-year to Tk 3.90 billion in the first half of FY26, supported by higher revenue and reduced tax pressure following a cut in tax deducted at source on gas bills.
Analysts say sustaining the turnaround will depend on improving operational efficiency and reducing system losses.
