Beximco seeks extension of loan tenure by 10 years

Beximco has sought support from the government to extend the repayment period of its liabilities to Janata Bank over the next 10 years, including a two-year moratorium.
On September 19, the sprawling conglomerate, led by Salman F Rahman, a close collaborator of former prime minister Sheikh Hasina, wrote to the finance adviser, central bank governor, the managing director of Janata Bank and other authorities concerned on this.
It also requested the authorities concerned to transfer all past dues to the interest-free block account. Transferring dues to an interest-free block account means the company will not have to pay any interest for its dues.
At the end of June, Janata’s total exposure to Beximco stood at Tk 25,000 crore, which is about 950 percent of the lender’s paid-up capital.
After the ouster of the Awami League government on August 5 in the face of a mass uprising, Beximco’s export-oriented goods, factories and all related infrastructure were extensively looted and set on fire by miscreants, the letter said.
“As a result, we have no working capital left with which we can carry out further export activities. Customers have already started moving their orders from us to other alternative destinations and we now have fewer orders compared to our capacity.”
If the situation continues, the company will lose its customers for good.
On the other hand, the company will have to downsize manpower and reduce other relevant expenditures to combat the present situation, the letter said.
Beximco, whose vice-chairman Rahman is now in jail on charges of murder, employs about 40,000 people.
In the application, Beximco also sought support from Janata to set up necessary back-to-back letters of credit against export letters of credit (LCs) that have already been received and are to be received now onwards.
The back-to-back LC is a secondary LC issued using the primary export LC as security.
It also sought bill discounting facility against the local supply of fabric and accessories at a 10 percent margin and packing credit facility at 15 percent against each export LC or order.
Besides, Beximco also urged for the release of the maturity amount after adjusting interest and charges from the related or respective export proceeds.
The maturity amount is the total amount that becomes due for payment at the end of a loan or credit facility period. In the context of export financing, this usually refers to the loan or advance taken by the exporter, such as back-to-back LC or packing credit.
The company paid the workers’ salaries amounting to Tk 69.05 crore for August after taking Tk 55 crore loans from Janata.
But it is concerning how the workers’ salaries for September amounting to Tk 65 crore would be paid.
“In this case, we specifically requested Janata Bank to deduct and build up this amount (Tk 65 crore) from our export proceeds which have already been received and are to be received until October 6 for payment of wages of the current month.”
Beximco has not received any credit facility from Janata after May 14, the letter added.