Home ›› Stocks

Intraco Refueling plans to expand its business

It going to merge with three other CNG stations
Staff Correspondent
29 Aug 2023 00:57:54 | Update: 29 Aug 2023 00:57:54
Intraco Refueling plans to expand its business

Intraco Refueling Station, a publicly traded entity, has taken a stride towards expansion by greenlighting a merger with three prominent CNG stations.

The company’s board of directors has given the green signal to the amalgamation proposition involving M HYE & Co CNG Refueling Station, Nessa & Sons Limited, and Good CNG Re-Fueling Station Limited. This step comes in the wake of the disclosure made by Intraco Refueling Station on Monday through the Dhaka Stock Exchange (DSE).

The amalgamation will be implemented subject to the approval of the Bangladesh Securities Exchange Commission (BSEC), the banks and other creditors of the company, the general meeting of MHCCRSL, NSL, and GCRSL and also subject to the approval of the amalgamation by the High Court Division of the Supreme Court of Bangladesh.

In an earlier move, in July of this year, Intraco Refueling Station had unveiled its merger intentions with five subsidiaries. The rationale behind this decision was anchored in optimising corporate tax benefits and streamlining administrative overheads.

In line with this course of action, the company had floated a convertible bond worth Tk 50 crore to fuel business expansion and had infused Tk 10.48 crore in these five affiliated companies.

In May 2023, Intraco Refueling Station embarked on a venture to supply compressed natural gas (CNG) to the industrial enclaves of Gazipur and Bhaluka. The company is poised to triple its turnover within three to four months upon activating this supply mechanism.

A strategic deal with the state-run Sundarban Gas Company, spanning a decade, has already been inked. The partnership will see Intraco receive gas from Sundarban Gas Company, compress it, and then facilitate its distribution through its specialised fleet.

Intraco Refueling Station’s shares have surged by an impressive 16.01 per cent over the past four days, climbing from Tk 65.6 on August 23 to Tk 41.3 on Monday after the company disclosed its merger proposal on stock exchanges on the day.

In a bid to maintain transparency and accountability, the Bangladesh Securities and Exchange Commission (BSEC) has appointed a special auditor to assess the utilisation of Intraco Refueling Station’s IPO funds. This audit will encompass the financial statements of the company up until 2024.

While the company witnessed a 19 per cent dip in earnings during the third quarter (January–March) of FY23, it remains steadfast in its pursuit of growth. The company’s consolidated earnings per share (EPS) for January–March 2023 stood at Tk 0.29, a decline from Tk 0.36 reported in the same period of the previous fiscal year.

However, the consolidated EPS for July 22–March 23 soared to Tk 1.35 from Tk 0.73 during July 2021–March 2022.

Intraco Refueling Station’s consolidated net asset value (NAV) per share reflected a positive trajectory, marking Tk 12.86 as of March 31, 2023, compared to Tk 12.21 as of June 30, 2022.

Having commenced its journey in the fuel sector through CNG stations, Intraco Refueling Station debuted on stock exchanges in 2018. In recognition of its commitment to stakeholders, the company extended 10 per cent cash dividends to its shareholders for the year 2022.

Its financial performance in the fiscal year 2021–22 demonstrated impressive growth, with revenue surging by 13 per cent to Tk 108.09 crore, while profits registered an impressive 39 per cent hike, reaching Tk 10.37 crore.

The company raised Tk 30 crore through an IPO to establish a bottling plant in Chattogram’s Patenga. However, the project underwent a metamorphosis, with Intraco Refueling Station opting to acquire a newly constructed LPG cylinder manufacturing factory instead.