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Beximco

In: Business and Management

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Beximco in severe cash crunch

Beximco in severe cash crunch

Claims Salman; BB help sought to reschedule its loans
Sajjadur Rahman
An extreme liquidity crisis has brought Beximco Ltd, the largest company of Beximco Group, on the verge of collapse.

So says Salman F Rahman, vice chairman of the group, in a letter to the central bank governor early this month.

“Beximco Ltd is facing an extreme liquidity crisis and is on the verge of closing down,” Salman said in the letter.

He blamed the situation on two factors -- politically motivated credit restrictions on the group between 2001 and 2008 and repayment of Tk 800 crore in bank loans in the last three years.

The group is beset by huge loans worth Tk 5,245 crore to seven banks and requires urgent restructure of its debt to survive, the letter said.

Beximco Ltd owes Tk 4,315 crore to four state-owned banks -- Sonali, Janata, Agrani and Rupali -- and the rest Tk 930 crore to three private banks -- AB, Exim and National.

The group also came up with a restructuring plan of all its debt. It wants to reschedule the loans up to 2026 with a moratorium period for 2.5 years. The group wants to pay only 10 percent interest against these loans, much lower than the market rates of 13-14 percent.

Beximco Ltd (Bangladesh Export Import Company Limited) operates in multiple industrial areas, including textiles, real estate, hospitality, marine food, commodities trading, ICT, ceramics and aviation. The company's largest division is Beximco Textiles, which was amalgamated with Beximco Ltd in 2011. The company's paid-up capital is Tk 601 crore and the public own more than 65 percent stakes in the company.

In the letter, Salman claimed Beximco's textile division is a pioneer in the country's backward linkage industry, which has paved the way for increased exports of value-added garments.

Over the last 10 years, Beximco

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