BB grants 10yr loan-rescheduling facility to Ring Shine Textile

The Bangladesh Bank has extended loan-rescheduling facilities to publicly listed Ring Shine Textile for up to 10 years, with a two-year moratorium period.

The company must make a 2% down payment on its total outstanding loans – 1% before the rescheduling and the remaining 1% after six months.

Interest accrued in the first year will be paid at the end of the grace period along with the principal amount.

Ring Shine Textile will also receive an eight-year rescheduling facility for its existing working-capital loans – OD, CC, and forced loans – with the same 2% down-payment – 1% before rescheduling and the remaining 1% after six months.

The policy support committee of the Bangladesh Bank approved the rescheduling facilities at its 37th meeting held on 18 September, chaired by Executive Director and committee convener Md Sirajul Islam.

In line with the committee's decision, the central bank issued a letter on 14 October to Ring Shine Textile and the respective banks that lent funds to the textile firm, according to the central bank's letter.

A disclosure was also published regarding loan rescheduling on the stock exchanges yesterday. 

Auniruddho Piaal, managing director of Ring Shine Textile, told TBS, "It's a great relief for us as well as for the company's shareholders that the central bank has extended support by providing rescheduling facilities for ten years."

He explained how the company will benefit from the rescheduling, saying that with a two-year grace period, it will incur zero finance expenses, whereas it now pays around Tk100 crore annually in loan-related costs.

"As we will not have finance expenses for two years, in the coming years, the company will show notable improvement in its financials," Auniruddho said.

He also noted that interest rates on overdraft and forced loans are currently very high – over 15%.

Due to the rescheduling facilities, these loans will be converted into term loans, with interest rates falling around 10%, which will reduce the annual interest burden significantly.

"With OD and forced loans being converted into term loans, the limits for both will be enhanced, which will also allow us to increase our imports of raw materials," Auniruddho added.

He said the company currently has around $8 million in foreign orders, and with fresh funding, it will be able to increase production.

Infograph: TBS

Outstanding loans 

In a letter on 2 July, Ring Shine Textile requested the central bank to reschedule its loans for 20 years at a low interest rate and with simple instalments.

Ring Shine Textile has Tk678 crore in loans – mostly term and short-term – across five banks as of 31 May 2025.

The lenders are Premier Bank, Dhaka Bank, Woori Bank, Eastern Bank, and ONE Bank.

Premier Bank and Dhaka Bank provided the largest portions of the loans, totalling over Tk570 crore – Tk283.42 crore and Tk286.68 crore respectively. 

Financial situation 

In the first nine months of 2024-25 fiscal year, Ring Shine Textile's sales increased by 160% to Tk240 crore over the same time of the previous fiscal year (FY24). 

Despite a notable growth in its revenue, it incurred a loss of Tk121 crore with Tk71.56 in financials expenses, and Tk49.81 loss from its operations that include administrative, selling and distribution expenses and increasing cost of goods sold, its financials statement ended on March 2025 showed.

Since being listed on the stock market, the company has paid only a 15% stock dividend in FY19 and has incurred significant losses for four consecutive fiscal years up to FY24, with no dividends declared during that time.

In a letter to the Bangladesh Bank, Ring Shine Textile stated that the company has been operating in the Dhaka Export Processing Zone since 1998. 

At the time of its establishment, Malaysian, Singaporean, Chinese, and Taiwanese entrepreneurs were shareholders of the company.

It was a leading producer and exporter of various yarns – including polyester, synthetic, woollen, and blended cotton – mainly producing and marketing grey and finished flitch yarn.

Ring Shine Textile entered into the capital market in 2019, raising Tk150 crore for business expansion through share issuance. 

The letter further mentioned that the company faced severe challenges due to intense domestic and international competition in the garment industry, and the Covid-19 pandemic. 

As a result, the company struggled with accumulated financial liabilities and substantial unpaid interest.

It also noted that, influenced by some people, banks at that time withheld loans and other financial facilities from the company. 

Consequently, in 2021 and 2022, the authorities were compelled to lay off workers at the factory on several occasions. Now, reshuffling the previous stuff, the present management is trying to revive the company.

In July, the Bangladesh Securities and Exchange Commission (BSEC) found that a syndicate, including controversial tax official Matiur Rahman and FAR Group Chairman Abdul Kader Faruk, embezzled hundreds of crores by issuing new shares of foreign-owned Ring Shine Textiles without investing any money.

Indian national Ashok Kumar Chirimar, the company's supply chain agent, was also involved. The BSEC imposed a travel ban on 13 individuals, including the company's sponsors, former directors, MD, ED, CFO, and company secretary.

The group allocated shares worth Tk112 crore (face value Tk10) without depositing funds, then allegedly raised Tk150 crore from the stock market post-listing and sold the free shares for profit.