City Bank-led consortium to arrange Tk300cr for SS Steel
With the money, SS Steel will buy 75% shares of Southeast Union Ceramic Industry Ltd
The City Bank Limited will lead a consortium of lenders to arrange a loan of Tk300 crore for SS Steel to buy 75% shares of Southeast Union Ceramic Industry Ltd.
SS Steel, which produces and sells MS Rods in the local market, has recently signed an agreement with City Bank.
As per the agreement, the private sector lender will arrange Tk200 crore as a term loan and Tk100 crore as working capital from different banks and non-banking financial institutions.
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With the money, SS Steel which is listed on the stock exchanges, will buy shares of the country's largest coal-based ceramics company.
On 24 March, shareholders of the engineering sector firm approved the investment in the ceramics company.
Javed Opgenhaffen, chairman of SS Steel, told The Business Standard (TBS) that the ceramics sector – especially when it comes to manufacturing tiles – has tremendous scope of doing good business in local and overseas markets.
"After completion of the purchase, shareholders will benefit from this investment," he added.
Located in Bagerhat, Southeast Union Ceramics is a China-Bangladesh joint venture initiative with an investment of Tk950 crore.
A few Chinese investors and Lockpur Group are the current owners of the company that manufactures ceramic tiles.
Currently, SM Amzad Hossain is the chairman of Southeast Union Ceramics, Lockpur Group, and South Bangla Agricultural Bank.
In August 2020, SS Steel acquired Chattogram-based Saleh Steel Industries Limited worth Tk160 crore.
In November, the stock market regulator set up an enquiry committee to investigate SS Steel's decision to invest around Tk160 crore in the acquisition of 99% of Saleh Steel Industry shares.
Southeast Union Ceramic
In June 2016, the Lockpur Group and Chinese investors signed a memorandum of understanding to set up a coal-based ceramic industry in Bangladesh.
The company started commercial operations in April 2017.
In an inaugural press briefing, SM Amzad Hossain had said, "We have set up a coal based ceramic industry because it is more likely to get an uninterrupted energy supply compared to gas based ceramic industries in Bangladesh."
The company's tiles production capacity is 4.30 lakh square feet daily. About 1,050 technical staff and workers are employed in this company, of whom, 50 are Chinese nationals.
The company runs under Chinese management in which Le U is the managing director.
According to the company, all raw materials including coal are imported from China, Malaysia, Indonesia, Vietnam, and India to meet their requirements.
It also sells tiles in the local market under the brand names of Seucl and Fondi.
