Confidence Cement sells its share in Dhaka factory for Tk141 crore to address liquidity issues
Confidence Cement PLC, a publicly listed cement manufacturer, has announced its decision to sell its entire 50% stake in Confidence Cement Dhaka Limited to its associate company, Confidence Power Holdings Ltd. The sale, amounting to approximately Tk 141 crore, is aimed at aligning the company's asset portfolio with its strategic goals and meeting immediate financial obligations.
The decision was formalized by the company's board on August 4, 2025. The sale will bring an end to Confidence Cement's investment in the Dhaka-based subsidiary, which was initially established in 2018 with an initial investment of Tk 5 crore.
The new unit, Confidence Cement Dhaka Limited, currently under construction in Narsingdi, boasts an annual production capacity of 18 lakh tonnes. The total cost of the project is estimated at Tk 815 crore, to be financed with a debt-equity ratio of 70:30.
In the past, Confidence Cement had applied to the BSEC to raise funds through a rights issue for the Dhaka factory investment. However, the proposal was rejected. Instead, the company had invested Tk 140 crore in the Dhaka factory.
The divestment will not affect the operations of the Chattogram-based parent company. Confidence Cement Dhaka Ltd was set up to cater to the market in Dhaka and the surrounding region, while the listed company's operations will remain focused in Chattogram.
Despite the divestment, Confidence Cement continues to show strong financial performance. The company's consolidated revenue for the first nine months of FY25 stands at Tk 317.64 crore. The year-on-year net profit for the same period surged by 20% to Tk 83.36 crore.
Moreover, Confidence Cement incurs a loss of Tk 6.22 crore after paying bank interest and charges, foreign currency exchange loss, and finance income. However, it posts a profit (before tax) of Tk 88.17 crore due to earnings from its associate company, Confidence Power Holdings, which made a profit of Tk 292 crore in the first nine months of FY25.
Confidence Power Holdings, which hosts four power plants in the Bogura, Rangpur, and Chittagong regions with a total generation capacity of 393.6MW, is a significant contributor to the group's overall profitability. Confidence Cement owns a 36% stake in the power holding company.
The funds from the divestment will be used for repayment of existing loans of Confidence Cement PLC. The company had Tk 566.78 crore in short-term borrowing and Tk 16.94 crore in long-term borrowing at the end of March.
Confidence Cement PLC has maintained a consistent dividend payout track record over the past 10 years, with an average of 23.75%. The company is committed to continuing this trend while focusing on strategic growth and financial stability.
The financial decision to sell Confidence Cement's 50% stake in Confidence Cement Dhaka Limited is a strategic move to align the company's asset portfolio, meet immediate financial obligations, and realign with its long-term goals. The proceeds from this divestment will be used for repayment of existing loans, emphasizing the company's commitment to financial stability.
