Laugfs Gas divests Bangladesh unit for US $ 23mn

Laugfs Gas yesterday said it disposed the full stake in its Bangladesh unit for US $ 23.39 million to an undisclosed buyer, with plans to use the sale proceeds to settle the group’s debt.

In a stock filing, Laugfs Gas said it disposed a 69 percent stake or 2,645,203 ordinary shares it directly held in its subsidiary Laugfs Gas (Bangladesh) Limited (LGBL), for US $ 16.1 million, on October 15. However, the filing did not give any indication about the buyer.  

Slogal Energy DMCC, a fully-owned subsidiary of Laugfs Gas, disposed the remaining 31 percent or 1,188,352 ordinary shares held in LGBL for US $ 7.25 million on the same day.

“The above proceeds are net of LGBL debts and will be utilised to reduce the debt exposure of the group,” Laugfs Gas Chairman W.K.H. Wegapitiya said.

Laugfs Gas recently said new entrants were eating into its market share in Bangladesh, due to unhealthy competition.

“Our operations in Bangladesh continued to face severe competition and rivalry, due to the large number of new entrants. While we consider competition to be healthy, numerous unhealthy, unethical practices by many entrants have affected the ethical players in the market and resulted in a decrease in our market share in Bangladesh,” the company said.

In FY2020/2021, Laugfs Bangladesh contributed to around 31 percent and 20 percent of the group’s revenue and assets, respectively.

For the quarter ended on September 30, 2022 (2Q23), Laugfs Gas reported a Rs.757.5 million net loss, on a revenue of Rs.8.11 billion, with finance cost rising above Rs.1.5 billion. 

For the first half, the group reported a net loss of Rs.2.5 billion, up from a Rs.1.8 billion net loss reported for the corresponding quarter of the previous year.

As at September 30, 2022, the group had over Rs.25.7 billion as interest-bearing loans and borrowings under current liabilities, up from Rs.18.6 billion six months ago.

Laugfs Gas share closed at 11.90 yesterday, up by 3.48 percent or 40 cents.