Paramount Textile to convert Tk293cr investment in solar subsidiary into preference shares
Tk200 crore will be converted into convertible non-redeemable preference shares, while the remaining Tk93 crore will be converted into non-convertible redeemable preference shares.
Listed textile manufacturer Paramount Textile has decided to convert its Tk293 crore investment in subsidiary Dynamic Sun Energy Pvt. Ltd, a 100MW solar power project, into preference shares as part of restructuring its investment.
According to a stock exchange disclosure, Tk200 crore will be converted into convertible non-redeemable preference shares, while the remaining Tk93 crore will be converted into non-convertible redeemable preference shares.
The company said it had made substantial investments in Dynamic Sun Energy, in addition to its equity contribution, to develop the solar project. Paramount Textile holds a 60% stake in the subsidiary.
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Under the restructuring, the Tk200 crore investment will be converted into preference shares with a face value of Tk10 each, carrying an annual dividend of 9%. These shares can be converted into ordinary shares within five years from the date of allotment.
The remaining Tk93 crore will be converted into non-convertible redeemable preference shares with the same 9% annual dividend and will be redeemed within five years.
Preference shares generally provide investors with fixed dividend income. Convertible non-redeemable preference shares can be exchanged for ordinary shares but do not have a fixed redemption date, while non-convertible redeemable preference shares cannot be converted into equity and are repaid after a specified period.
The investment restructuring comes as Paramount Textile continues to diversify into renewable energy. Besides Dynamic Sun Energy, the company has investments in associate Paramount BTrac Energy Ltd, a 200MW HSD power plant.
In March this year, it also decided to invest Tk29 crore in Paramount Solar Limited by acquiring a substantial stake in the company.
Despite weaker sales, Paramount Textile has maintained profitability this fiscal year.
During the first nine months of FY26, its revenue fell more than 15% year-on-year, while net profit edged up to Tk96.81 crore from Tk96.41 crore a year earlier.
The company said operating profit declined 14% because of lower revenue. However, a 250% surge in profit from associate companies to Tk36 crore and a 631% increase in other income to Tk10.81 crore offset the decline.
In the January-March quarter, revenue dropped 30% to Tk245.71 crore. Although operating profit fell 25%, quarterly net profit rose 6% to Tk52.65 crore, supported by Tk15.79 crore in earnings from associate companies.
For FY25, Paramount Textile posted a net profit of Tk116.06 crore with earnings per share of Tk6.48 and declared a 12% cash dividend for shareholders.
