Sonali Bank to auction Oryza Agro assets to recoup Tk40cr debt
Sonali Bank has announced plans to auction off the assets of Oryza Agro Industries Limited in a bid to recover an outstanding loan of Tk39.55 crore.
An auction notice was published in daily newspapers recently, inviting interested buyers to submit price quotations by 25 February. The auction will follow provisions of the Money Loan Court Act, 2003, the notice added.
As per the notice, 222.25 decimals of land located in Mymensingh, along with Oryza Agro's factory building and the machineries inside, are up for auction. All the assets are owned by the company, the notice stated.
According to the company's prospectus, Oryza Agro Industries secured a project loan of approximately Tk10 crore from the agro-based project financing division of Sonali Bank in 2015, followed by a short-term loan of Tk9.50 crore in 2017.
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Satya Ranjan Saha, deputy general manager of Sonali Bank, told The Business Standard that the company has failed to pay any installments for over two years, despite repeated reminders. As a result, the bank is now taking legal action to recover the loan by auctioning the company's assets in accordance with banking regulations.
When contacted for comments regarding the auction, Bayazied Hossain, company secretary of Oryza Agro, did not respond to phone calls.
Oryza Agro is a feed manufacturer specialising in the production and marketing of animal feed.
In 2021, the company raised Tk10 crore by issuing shares at Tk10 each through the SME platform of the Dhaka Stock Exchange. Of the proceeds, Tk1 crore was allocated for repaying Sonali Bank's loan, while Tk8 crore was invested in business expansion, according to its prospectus.
Imperial Capital Limited and City Bank Capital Resources Limited served as the issue managers for the offering.
Its shares closed at Tk14.80 yesterday, which was 4.23% higher from the previous session at the Dhaka bourse.
Financial performance
In FY24, Oryza Agro reported a 39% increase in revenue, reaching Tk96.56 crore, while net profit surged by 171% to Tk7.28 crore compared to the previous year.
The company's earnings per share (EPS) stood at Tk1.05 in the last fiscal year. Capitalising on this profit growth, it announced a 5% cash dividend for shareholders.
However, the payout has yet to be disbursed.
In response, the DSE issued a query regarding the delay, but the company has yet to provide a response.
Earlier, in November 2024, the Bangladesh Securities and Exchange Commission (BSEC) directed Oryza Agro to disburse its approved dividends for FY22 and FY23 by 15 December.
The regulator also warned that if the company failed to comply, each director would face a fine of Tk47 lakh. Following this warning, Oryza Agro disbursed its pending dividends on 15 December, according to the DSE.
