GBB Power Ltd is likely to reopen its 20MW power plant on "no power, no payment" basis at the risk of a further cut in future profits.
The plant, which was shut down on Friday upon expiry of a 15-year power purchase deal, endured a 7.80 per cent year-on-year drop in profit to Tk 81.50 million in the nine months through March this year.
Its earnings declined mainly due to the gas price hike since January. The plant's gas bill soared 137 per cent to nearly Tk 131 million in January-March wiping out much of the profits gained in the previous two quarters.
In a disclosure made on Sunday, the company said it had already sought an extension of the deal with Bangladesh Power Development Board (BPDB) in January.
The power purchase agreement is likely to be extended on "no power, no payment" basis, as discussed with the BPDB, unless any major policy-level change happens, said a company official.
Company secretary Mohammad Sattar Hossain said the company would stop receiving any payment in the form of capacity charge under a fresh deal, if signed, for power generation.
Market analysts say shares of GBB Power have not been profitable since the beginning as the company got listed in the stock market with just one power plant.
According to company sources, GBB Power tried to get regulatory approval for construction of more power plants, but to no avail.
Shareholders are in fear of losses as the only power plant of the company had to suspend operation threatening to drive the business into the red in the upcoming quarters if the government does not extend the agreement.
Established in 2006, GBB Power entered into a joint venture agreement with Caledonian Power to set up a power plant. The joint venture then signed the power purchase deal with the BPDB for 15 years.
Under the agreement, a 20MW power plant was set up in Bogura on a build-own-operate basis. Its commercial operation started in 2008. This subsidiary of GBB Group was listed in the stock market in 2012.
The company's share price, the lowest among 23 listed companies in the power sector, has remained stuck at Tk 15.10 on the Dhaka Stock Exchange in the last two weeks.
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