Three state-owned telecom companies would offload shares later this year as part of a multi-prong government effort to boost supply of quality shares in the country's capital market, officials said Sunday.
Teletalk Limited, the country's bottom-ranked mobile phone company, heads the list as it has finalised a plan to float 25 per cent of its shares in the stock market, posts and telecommunications secretary Sunil Kanti Bose said.
Telephone Shilpa Sangstha, built in the 1960s to manufacture land phone sets, and Bangladesh Cable Shilpa Sangstha, which makes telecom wire, are the other ventures that have planned to raise fund from the share market, he said.
"All three firms will be floated by the end of this year as the government seeks to cement the growth of the country's capital market through offloading of state-owned enterprises," he said.
The government had earlier announced its plan to list 23 other companies including some of the profitable energy firms.
The Secretary said the board of Teletalk approved a plan to offload one in four shares of the company last year and now it was giving final touch to the listing procedure.
Bangladesh Telephone Shilpa Shangstha, which has lost much of its market share due to emergence of mobile phone as the prime mode of telephony, has taken steps to transform the venture into a public limited company, Bose said.
The transformation is required for share floatation, he told the FE, adding steps to offload shares of Bangladesh Cable Shilpa Shangstha are also going on in full swing.
Experts are skeptic whether the listing of three companies, which have suffered heavy losses in recent years, can boost the capital market.
"Teletalk is the worst performers among the country's six cell phone companies. It lacks the financial muscles that other companies can flaunt in the capital intensive mobile phone sector," an expert said.
"The other two companies are on death bed as they make gadgets that have become obsolete in the fast changing telecommunications sector," he added.
Teletalk officials said the company would raise fund to finance its expansion. The company has more than one million subscribers, or less than two per cent of the country's entire mobile phone market.
The company has paid-up capital of Tk 6.43 billion, fully owned by the posts and telecommunications ministry.
A Teletalk official said the company was ready to offload shares within the next three months. "We have made all necessary preparations and are waiting for the government's final nod," he said.
"Only things remaining are an interim auditing, appointment of issue manager and preparing prospectus and other documents," he added.
Teletalk made Tk 410 million earning before interest, tax, depreciation and amortisation (EBITDA) as of June 2009.
The company made a net loss of Tk 1.3 billion for 2008-09 but the non-cash expenditure of depreciation and amortisation was Tk 1.71 billion.
The funds raised through selling Teletalk shares would be used for introducing latest third generation (3G) mobile phone technology in the country, the official said.
"We need to invest at least US$260 million to launch 3G telecom services in the country. We hope direct listing of the company would raise a significant amount of that fund," he added.
At present the company is using 2.5G technology, which is fast losing touch with the new generation mobile phone users. After the introduction of 3G technology, data and voice transfer, internet services and video conferencing would be much faster, he said.
The company expects to have 1.5 million 3G subscribers and four million 2.5G subscribers within the next couple of years.
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