Flash Report /
Bangladesh

Grameenphone given 90 days to pay second half of BDT20.0bn

    IDLC Securities
    24 February 2020
    Published byIDLC Securities

    According to newspaper reports, the Appellate Division of the Supreme Court (ADSC) has ordered Grameenphone (GP) to pay the second half of the BDT20.0bn (ie BDT10.0bn, USD117.6mn) within the next 90 days. 

    Please note that the ADSC earlier instructed GP to pay BDT20.0bn (USD235.2mn) by 24 February 2020 to continue the stay-order against non-issuance of NOC. GP already deposited half of the amount (BDT10.0bn, USD117.6mn) on the 23 February 2020 (yesterday). Today, the ADSC has extended time for 90 days for GP to pay the rest half of the amount.

    Since GP has abided by the ADSC’s order and already deposited the first instalment yesterday, the regulator is supposed to start issuing NOCs (a kind of regulatory approval) on GP’s behalf. Therefore, we expect GP to start network expansion and launch of new packages soon. Also, the tension regarding the appointment of the administrator is likely to calm down now.

    Note that this payment for the stay-order is not the final verdict on the total dispute claim of BDT126bn (US$1.5bn). We expect GP to resume dialogue with the regulator to solve the dispute soon.

    The impact of BDT20.0bn (USD235.2mn) payment is BDT14.8/share. Our valuation already considers a BDT33.0 per share payment for the audit dispute. Therefore, the impact of this payment is already implied in our valuation, keeping our target price unchanged at BDT438.8 per share.