Tk 1,100cr Janata loss in revised restructuring of Beximco loan

Bank also submits Tk 666cr loan restructuring plan for Tharmex to BB

A file photo shows a Janata Bank office at Motijheel in Dhaka. The Janata Bank has approved a revised proposal to restructure Tk 1,849.10 crore loans of BEXIMCO group which will increase the bank’s loss against the loans to Tk 1,122 crore from earlier estimated Tk 838 crore. — New Age photo

The Janata Bank has approved a revised proposal to restructure Tk 1,849.10 crore loans of BEXIMCO group which will increase the bank’s loss against the loans to Tk 1,122 crore from earlier estimated Tk 838 crore.

The bank has already submitted the revised proposal early this month to Bangladesh Bank seeking permission to allow BEXIMCO to pay only 9.82 per cent interest and repay the loans in between 6 years and 12 years.
Janata Bank has placed another proposal to the BB for restructuring a Tk 666 crore loan of Thermax Group with similar conditions.
Janata Bank’s management calculated a probable income loss of Tk 1,122 crore in the next 12 years due to restructuring of BEXIMCO Group loans as the bank will have to set a 9.82 per cent interest rate on the loan instead of the existing rate of 15 per cent.
The bank, however, earlier calculated a loss of Tk 838 crore as its board had set an interest rate of 10 per cent instead of 16 per cent against BEXIMCO Group’s loan.
The amount of loss will increase as the BB in its large loan related circular asked the banks to fix the interest rate in accordance with respective bank’s cost of fund plus one per cent. Janata sent the fresh proposal in line with the BB’s new circular scrapping the earlier decision of the board.
The bank’s cost of fund was 8.82 per cent in December when it finalised the fresh proposal.
The banks have to submit the large loan restructuring proposals by June 30, 2015 in line with the central bank’s circular.
The bank’s proposal showed that BEXIMCO Group was set to get a grace period of one year and the group will get a scope to repay its term loan within 12 years and working capital within 6 years.
Under the large loan restructuring programme, the term loan of BEXIMCO Group with Janata Bank was Tk 1,010.36 crore and working capital Tk 838.74 crore as of September 30, 2014.
The total liabilities of BEXIMCO Group with Janata Bank, however, stood at Tk 2,587.81 crore as of September 30, 2014 of which funded liabilities amounted to Tk 1,723.80 crore and non-funded Tk 864 crore as of September 30, 2015.
The Janata Bank proposal showed that five concerns of BEXIMCO Group had been brought under the large loan restructuring programme of which liabilities of International Knitwear and Apparels Ltd (unit-1) Tk 223.43 crore, International Knitwear and Apparels Ltd (unit-2) Tk 320.27 crore, Crescent Fashions and Designs Ltd Tk 177.11 crore, Esses Fashions Ltd Tk 223.57 crore and Bangladesh Export Import Company Ltd stood at Tk 904.72 crore as of September 30, 2015.
According to the proposal, BEXIMCO Group will have to pay Tk 7 crore with interest rate and principal
amount for the first year to Janata Bank after approving the proposal by the BB and it (BEXIMCO) will pay Tk 52 crore for the second year and Tk 153 crore from the third year to 12 year.
The group will have to pay Tk 184.91 crore to Janata Bank as down payment for its total loan amount for restructuring.
A Janata Bank official told New Age on Tuesday that the bank would also face a large amount of loss due to Thermax Group’s restructuring proposal.
The official did not confirm what amount of loss will be incurred by Janata Bank due to Thermax Group’s restructuring proposal.
Janata Bank managing director Md Abdus Salam told New Age on Tuesday that the loan restructuring proposal of BEXIMCO Group had been placed to the central bank in line with the BB circular.
When asked what amount of loss would be incurred by his bank due to the restructuring, he said there was no question about the profit or loss. ‘We have just submitted the proposal in accordance with the central bank directions’.
He said that his bank had submitted the loan proposals for BEXIMCO Group and Thermax Group this month as the deadline would expire on June 30, 2015.
Despite repeated attempts, BEXIMCO Group vice-chairman Salman F Rahman could not be reached over mobile phone for his comments.

Source: New Age

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