Paramount Textile to buy 80pc stake in Intraco Solar for Tk 60cr

Paramount Textile is set to buy an 80 per cent stake in Intraco Solar Power for around Tk 60 crore in a bid to enter the renewable energy market.

The listed textile-maker has reached an agreement with Intraco CNG to buy 29 per cent share for Tk 18.48 crore, Paramount Textile said in a disclosure published on the Dhaka Stock Exchange (DSE) website yesterday.

"We will buy the remaining 51 per cent stake from Intraco CNG soon," said Md Robilul Islam, company secretary of Paramount Textile, which had its trading debut in 2019.

The company has paid-up capital of Tk 147.69 crore, according to DSE data.

Paramount Textile continued to grow amid the pandemic thanks to its diversified business pattern. "And we want to continue diversifying," added Islam.

The government approved Intraco Solar Power to set up a 30-megawatt plant. The construction is yet to begin.

"We will set up the plant at the cost of around Tk 350 crore," Islam said.

The owners would take bank loans to finance the project.

The proposed solar power plant project, located in Gongachhora of Rangpur, has a 20-year tenure. The power tariff will be 18 US cents per kilowatt.

Since Paramount Textile has expertise in the power plant business, it decided to move ahead with the expansion, Islam added.

The textile-maker's diverse portfolio made it possible to book higher profits in the July-September quarter of the fiscal year.

In the quarter, Paramount Textile raked in Tk 12.98 crore in profits from its investment in the power plant project. The company's total profit was Tk 22.23 crore in the period.

As a result, the textile-maker topped the chart of listed apparel companies in terms of earnings per share, which stood at Tk 1.51 in July-September.

Paramount Textile made an equity investment in Paramount BTarc Energy in 2018. It holds a 49 per cent stake in the 200-megawatt power plant situated in Sirajganj.

"Our last year's business was impacted due to the spread of the Covid-19, but the power plant business saved our profit growth," Islam added.

The company took home Tk 515 crore in sales from its textile business in 2019-20, a 9.17 per cent drop compared to the previous year. Gross profits declined 6 per cent to Tk 79 crore in the last fiscal year.

Despite the lower gross profit, Paramount Textile's net profit rose 60 per cent to TK 65 crore riding on higher profits from the power plant business.

The profits from the power plant segment rose 278 per cent to Tk 36.77 crore.

Yesterday, stocks of Paramount Textile closed 0.69 per cent higher at Tk 58.60.