Now UCB to auction off SS Steel assets to recoup Tk290cr debt | The Business Standard
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FRIDAY, JUNE 13, 2025
Now UCB to auction off SS Steel assets to recoup Tk290cr debt

Stocks

Ahsan Habib Tuhin
14 April, 2025, 12:20 am
Last modified: 14 April, 2025, 12:21 am

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Now UCB to auction off SS Steel assets to recoup Tk290cr debt

In January, Bank Asia announced plans to auction off the assets of SS Steel to recover an outstanding loan of Tk167.56 crore

Ahsan Habib Tuhin
14 April, 2025, 12:20 am
Last modified: 14 April, 2025, 12:21 am
Infographic: TBS
Infographic: TBS

United Commercial Bank (UCB) has announced plans to auction off the assets of publicly listed SS Steel Limited in a bid to recover an outstanding loan of Tk290 crore. 

An auction notice issued by the Pragati Sarani branch of the bank, published in daily newspapers on Friday, invited interested buyers to submit price quotations by 8 May. The auction follows provisions of the Money Loan Court Act, 2003.

As per the notice, 135.79 decimals of land in Narayanganj — including the factory building and machinery — and 199.12 decimals of land with infrastructure in Chattogram are up for auction. All assets are owned by SS Steel.

In the auction notice, the bank stated that the company had taken a loan by mortgaging its land. According to the agreement, the bank was granted the authorities to sell the mortgaged land without court approval to recover the loan. However, as the company failed to repay the loan instalments on time, the mortgaged land will be auctioned to recover the dues.

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When contacted for comments regarding the auction, Javed Opgenhaffen, who holds a 22.74% stake in SS Steel and serves as the company's chairman, did not respond to phone calls.

Earlier in January, Bank Asia announced plans to auction off the assets of SS Steel to recover an outstanding loan of Tk167.56 crore.

According to the notice, 148.5 decimals of land in Gazipur — along with the factory building and machinery — are up for auction. All assets are owned by SS Steel.

Bank sources said the company initially took a demand loan for working capital. However, despite multiple notices, SS Steel failed to make timely loan repayments, prompting the auction proceedings.

In response to a query from the Dhaka Stock Exchange (DSE) over the dispute with Bank Asia, the company said, SS Steel would address the auction notices from Bank Asia and other financial institutions through its legal department while remaining committed to its customers, shareholders and stakeholders.

The company further stated that despite significant economic and political challenges, ongoing energy and gas crises, and the substantial devaluation of the taka against the dollar, SS Steel achieved sales of Tk2,407 crore in FY24. The company projects sales to exceed Tk3,500 crore in FY25.

According to the company's audited financial statement, SS Steel's loan burden surged dramatically, increasing by 113% to Tk1,967 crore, in the last fiscal year compared to FY23. 

Notably, the total loans were 251% higher than the company's shareholders' equity.

In FY24, SS Steel reported a 62% surge in consolidated revenue, reaching Tk2,407 crore, driven primarily by income from its subsidiary companies. However, the company posted a modest net profit of just Tk5 crore.

The company recommended a 2% cash dividend for its shareholders in the last fiscal year, which was approved at a recent annual general meeting.

Owing to its failure to disburse dividends on time, the DSE downgraded the company's shares to the Z category.

Today, the stock closed at Tk7.80, down 1.27% from the previous session.

In 2018, SS Steel raised Tk25 crore through its initial public offering (IPO) by issuing 2.5 crore shares at a face value of Tk10 each.

In August 2020, SS Steel invested around Tk160 crore in Saleh Steel and acquired 99% shares of the company. Saleh Steel produces and sells rods and coils under its brand name and its annual production capacity is around 84,000 tonnes.

In April 2022, SS Steel also invested in Al-Falah Steel and Re-rolling Mills Limited by acquiring 99% of its shares at Tk87.46 crore. Al-Falah Steel's production capacity is around 64,800 tonnes of steel per year.

The company had plans to further invest Tk96.68 crore in Al-Falah Steel as a share money deposit.

After all its acquisitions, SS Steel's accumulated annual production capacity reached 442,800 tonnes of MS rods per year.

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United Commercial Bank (UCB) / SS Steel Limited / Bangladesh

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