Energypac Power Generation PLC, once a prominent player in the country's power and energy sector, is now grappling with a severe financial crisis, with the company sinking into negative retained earnings.
A persistent accumulation of losses, totaling Tk306 crore since the 2022-23 fiscal year, has eroded the company's financial health, resulting in negative retained earnings of Tk53.73 crore.
The deterioration was further highlighted in the first quarter of FY26 (July–September), when revenue plunged 35% to Tk60.57 crore, culminating in a net loss of Tk58.60 crore for the quarter.
The immediate impact was felt on the Dhaka Stock Exchange (DSE), where investor sentiment soured, driving the company's share price down 7.95% to close at Tk16.20 on Sunday.
This current trading price represents a staggering erosion of value for shareholders, standing far below the initial public offering (IPO) price.
Energypac listed on the Dhaka bourse in 2021, issuing shares at Tk35 to eligible investors under the book-building method, while general public investors received shares at Tk31.
Market analysts say the stock has lost more than half its value since debut.
The company reported its net asset value (NAV) per share with revaluation at Tk29.86 at the end of September 2025, marking a 9% decline compared to the previous fiscal year.
In its price-sensitive information statement, Energypac attributed the deepening losses primarily to a sharp increase in finance charges, exacerbated by rising interest rates.
The company noted that temporary negative retained earnings and the declining NAV are outcomes of industry-wide revenue erosion, escalating finance costs, and legacy debt obligations.
However, management offered a glimmer of hope, citing a recently secured 10-year restructured financing facility from Bangladesh Bank, which includes a two-year grace period.
The facility is expected to ease debt-servicing pressure, potentially restoring retained earnings and enhancing NAV.
According to the unaudited report, the company's total term loan burden stood at Tk1,327 crore as of September 2025, with Mercantile Bank, Bank Asia, and Eastern Bank as major lenders.
To manage liquidity and operational needs, the board has turned to asset liquidation. The board recently approved the sale of 16.50 decimals of land in Tejgaon Industrial Area to sister concern Energypac Fashion Limited for approximately Tk33 crore, following an earlier sale of 597 decimals for Tk19 crore.
A review of historical performance shows a drastic shift. Revenue peaked at Tk2,033 crore in FY22 but collapsed to Tk800 crore in FY23, then shrank to Tk280 crore in FY24 before a slight rise to Tk308 crore in FY25.
Profitability has also evaporated; after posting Tk39 crore in FY21 and Tk9.70 crore in FY22, losses surged to Tk45 crore in FY23 and ballooned to Tk105 crore in FY25.
Currently, Energypac generates revenue from liquefied petroleum gas (LPG) under the G-Gas brand, building materials, JAC-branded motor vehicles, and its power and energy division.
However, much of the revenue erosion stems from strategic restructuring. Until FY23, the company earned substantial revenue from three power plants – Energypac Power Venture Limited, Energypac Power Venture Ctg Limited, and EPV Thakurgaon Limited – which were later transferred to Sonargaon Leather and Rexin Cloth Industries Limited, also owned by the company's directors.
A senior officer, speaking anonymously, said this transfer was the main cause of the revenue fall. "The company's core legacy business of assembling and selling transformers has slowed due to declining government demand."
Simultaneously, a sharp drop in private investment in the power sector has hurt power equipment sales, he said.
Consequently, Energypac declared no dividend for FY24 and recommended a modest 2% cash dividend for public shareholders for FY25, reflecting constrained cash flow.
On 25 September, the Dhaka bourse downgraded Energypac Power to the Z category from B as it failed to disburse at least 80% of its declared 5% cash dividend for FY23.
After distribution on 29 September, the DSE returned the firm to the B category.
Of total shares, sponsors and directors hold 54.14%, institutional investors 16.51%, and the remaining 29.35% is held by public shareholders.