TBS
The initiative, backed by policy-level support from the Bangladesh government, aims to revive one of the country’s largest textile operations and generate employment for nearly 25,000 workers, according to sources in the labour ministry
Highlights:
- Beximco factories reopening under lease with Japanese Revival Project
- $20M investment planned; Inditex orders to drive production
- Janata Bank rescheduling Tk35,000cr in defaulted textile loans
- Revival to earn service charge; profits repay outstanding debts
- Bangladesh Bank easing export policies, offering credit facilities
- Reopening motivated by economic, not political, considerations
The long-shuttered factories of Beximco Textiles Limited are poised to reopen under a tripartite lease agreement involving Japanese firm Revival Project Limited, Janata Bank, and Beximco Group.
The initiative, backed by policy-level support from the Bangladesh government, aims to revive one of the country’s largest textile operations and generate employment for nearly 25,000 workers, according to sources in the labour ministry.
Revival Project Limited will arrange a $20 million back-to-back Letter of Credit (LC) from a foreign bank to fulfil purchase orders from global apparel giant Inditex. Garments will be produced by Beximco Textiles, which has been inactive since February following months of worker protests over unpaid wages.
Beximco Managing Director Osman Kaiser Chowdhury said the group has formally agreed to the Revival proposal. “After 10 months of tireless effort, we’re finally making progress toward reopening the factories,” he said. “We have the government’s policy-level support.”
The company’s factories – around 15 in total – were previously owned by Salman F Rahman, a former adviser to the prime minister, who is currently imprisoned.
To facilitate the reopening, Janata Bank will reschedule defaulted loans totaling approximately Tk35,000 crore.
Under the lease agreement, Revival Project will receive a service charge from potential earnings, while the remaining profits will be used to repay outstanding debts. The Bangladesh Bank will relax export-related banking policies and extend credit facilities to Revival Project Limited, with additional support from the finance ministry.
The labour ministry is coordinating the agreement, which was approved during an inter-ministerial meeting on July 22 chaired by Labour Secretary AHM Shafiquzzaman.
The meeting included representatives from Bangladesh Bank, Janata Bank, the Bangladesh Investment Development Authority (Bida), Revival Project Limited, and Beximco Textiles.
Key components of the deal
- Loan Rescheduling: Janata Bank and other lenders will reschedule Beximco Textiles’ defaulted loans, which total an estimated Tk35,000 crore. The bank’s exposure alone is approximately Tk23,000 crore.
- No New Government Loans: The government has made it clear it will not provide any fresh loans. Instead, it will offer policy and regulatory support to Revival Project Limited to ensure a smooth transition.
- Profit Sharing: Under the lease agreement, Revival Project will receive a service charge from the factory’s earnings, with the remaining profits going directly toward repaying the rescheduled loans.
- Central Bank Support: The Bangladesh Bank will relax existing policies and provide export-related banking facilities to the Japanese investor to facilitate the reopening.
Reopening ‘driven by economic priorities, not political’
Secretary Shafiquzzaman emphasized that the reopening is driven by economic priorities, not political considerations.
“We’ve decided to reopen the factories considering the government’s investment, the bank’s loans, employment opportunities, and export income,” he said. “Beximco’s factories are fully compliant and equipped with modern machinery.”
He warned against repeating past failures, referencing the collapse of Hallmark Group: “The government doesn’t want such a factory to meet the same fate as Hallmark. Hallmark’s machines now can’t even be sold by weight.”
“[We don’t] want such a factory to meet the same fate as Hallmark. Hallmark’s machines now can’t even be sold by weight.”
Janata Bank’s loan exposure Tk23,000cr
The government previously provided an interest-free Tk585 crore loan to Beximco to settle unpaid wages. Janata Bank alone holds Tk23,000 crore in exposure to the company, with total banking sector exposure nearing Tk35,000 crore.
Revival Project Limited has submitted an Expression of Interest and received a Letter of Comfort from Beximco Group.
The Japanese firm has proposed appointing Deloitte as the auditing body and plans to deploy a seasoned Japanese management team. Itochu Corporation has given policy-level approval to participate in follow-up management if the lease and Inditex orders are secured.
$20m to be invested
Dr Farhan S Karim, President of Ecomilli and Associate Professor at Arizona State University, said Revival Japan and Ecomilli will jointly invest $20 million, with potential to scale up to $100 million through the Buet Investment Network. “It will take 2-3 years to rebuild buyer confidence, recruit skilled staff, and ensure sustainable production,” he noted.
Beximco MD Osman Kaiser added that Revival Japan has until 15 August to negotiate new working capital with banks. If successful, the deal could be signed within the month. “Once an LC is opened, it takes 120 days to receive payment. In the meantime, working capital will be needed to pay workers and meet other costs.”
100% LC margin will be required
A Bangladesh Bank representative noted that a 100% LC margin will be required to open back-to-back LCs against master LCs. No Objection Certificates (NOCs) from the Finance Division and Financial Institutions Division will be needed to reschedule existing loans.
Janata Bank MD & CEO Md Mazibur Rahman said he would present recommendations in the next meeting after discussions with Beximco and Revival Japan.
A Bida representative added that if Janata Bank declines to provide short-term loans, other banks may be considered.
