Titas Gas Transmission and Distribution Company has received regulatory approval to issue nearly 283 million preference shares to the government against accumulated share money deposits, in a move aimed at complying with a five-year-old directive.
According to a disclosure filed with the stock exchanges on Monday, the company will issue irredeemable, non-cumulative preference shares with a total face value of Tk 2.83 billion.
Earlier, on December 24 last year, shareholders approved the issuance of preference shares at an extraordinary general meeting (EGM).
Preference shares-commonly known as preferred stock-entitle holders to dividends before any payouts to ordinary shareholders. However, the non-cumulative nature of these shares means the government will not be entitled to unpaid dividends in case of any missed payments.
The board prefers issuing preference shares rather than ordinary shares to ensure that existing shareholders are not affected, said a company official, requesting anonymity.
Only ordinary shares boost paid-up capital. Preference shares, however, oblige the company to pay dividends to shareholders before any dividends are issued to common stockholders.
Although preference shares will not be included in equity shares, they will increase fixed payment liabilities for the company, as the government will get priority over common stockholders in the distribution of profits.
Thus, existing shareholders’ return on investment would be reduced due to dividend payouts to the government on preference shares.
The government has injected funds into the company as share money deposits for various projects over time since the company’s inception in 1964.
Share money deposit refers to money paid in exchange for shares that have not yet been issued.
Titas Gas will issue shares against share money received as of June 2023. However, the outstanding amount of such share money deposits stood at Tk 3.52 billion as of December 2025, leaving around Tk 690 million yet to be converted.
The move comes in line with a 2020 directive from the Financial Reporting Council (FRC), which instructed state-owned companies to convert accumulated share money deposits into equity to ensure the government receives returns on its investments.
Other state-run firms, including Power Grid Company of Bangladesh and Dhaka Electric Supply Company, have undertaken similar measures in recent years.
Meanwhile, despite the disclosure, Titas Gas shares edged up 0.60 percent to Tk 17 each on the DSE on Monday.
Financial performance Once a strong and profitable entity providing consistent dividends to shareholders, Titas Gas has incurred significant losses over the past three fiscal years due to high system losses and increased minimum tax burdens.
The company reported cumulative losses of nearly Tk 17 billion between FY23 and FY25.
However, recent financial results suggest a turnaround. Losses narrowed by 45 percent year-on-year to Tk 3.90 billion in the July-December period of FY26, supported by higher revenue and reduced tax pressure.
The improvement was partly driven by changes under the Finance Ordinance 2025, which reduced tax deducted at source (TDS) on gas bills to 0.6 percent from 2 percent, easing the company’s tax burden.
Market observers say the sustainability of this recovery will depend on further reductions in system losses and improvements in operating efficiency.
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