BD Welding seeks new investor to revive long-shuttered operations

Infographics: TBS

Dhaka-based listed company Bangladesh Welding Electrodes (BD Welding) is actively seeking a new investor to restart its long-closed factory, rehire employees, and overcome a prolonged financial crisis.

The company's board has expressed hope that securing a new investor will enable it to resume production, stabilise operations, and pay outstanding listing fees to the stock exchange in instalments. BD Welding communicated this critical update to the Dhaka Stock Exchange (DSE) today (29 November).

Shares of the company closed at Tk9.60 during today's trading session on the Dhaka bourse.

According to the stock exchange disclosure, BD Welding – listed in 1999 – regularly paid its annual listing fees until 2012. From 2013 onwards, however, the company failed to continue payments due to mounting operational and financial difficulties, leading to sizeable arrears.

The company reported that its former factory in Chattogram suffered repeated flooding and landslides until 2017, at times remaining submerged under 5-6 feet of water. The disasters caused severe damage to raw materials, finished goods, and machinery. Although all assets were insured with Federal Insurance Company Limited, the insurer rejected the claims. BD Welding later filed a lawsuit in the District and Sessions Judge Court and was awarded Tk2 crore in damages, but the insurer appealed, and the case remains pending.

BD Welding has not produced any goods since 2016. Its failure to repay bank loans triggered an auction process for its factory. The then managing director managed to halt the auction and, following an Extraordinary General Meeting, the company sold the Chattogram factory land – excluding structures and machinery – to clear its bank liabilities. 

It subsequently bought land in Dhamrai, Dhaka, and relocated machinery there. However, financial limitations prevented the construction of a factory shed and the reinstallation of equipment, keeping production suspended indefinitely. Except for two office staff, all employees were placed on unpaid leave.

Over this period, office rent, utility bills, and annual fees payable to the DSE, CSE, and CDBL accumulated. In 2021, amid escalating financial stress, the Bangladesh Securities and Exchange Commission (BSEC) appointed two independent directors and restricted the sale or transfer of company assets. Three additional independent directors were later appointed, leading to a reconstitution of the board. The new board subsequently lifted restrictions on the Chattogram property and completed its transfer.

The company has since divided its remaining Dhamrai land, appointed three security guards, and resumed regular salary payments to the managing director and three office staff. Outstanding rent and utility bills have also been cleared.

The former managing director, who had long battled cancer, passed away on 3 January 2023, adding to the company's challenges. The reconstituted board is now seeking a strategic investor to restart production, restore financial stability, rehire employees, and settle overdue listing fees in instalments.

BD Welding has also requested regulatory authorities to extend the deadline for settling its outstanding listing fees and other dues until a new investor is secured.