Sea Pearl liabilities grow amid dwindling business  

Sea Pearl Beach Resort has been experiencing a decline in business for months due to political uncertainties and the July-August mass uprising.

In the July-September quarter, the hospitality company's revenue plummeted by 84%, dropping to Tk9.56 crore from Tk59.47 crore in the same period last year. It reported a net loss of Tk12.74 crore, a stark contrast to the Tk 19.58 crore profit recorded a year ago.

Amid these challenges, its auditor has raised concerns about the company's growing burden of loans and other liabilities.

In its qualified opinion, the auditor said the listed company has debts and liabilities amounting to Tk631.17 crore, which constitute 72.03% of its total assets. These debts and liabilities include long-term and short-term loans, SPBRSL 20% convertible secured bonds, lease financing, and other related party debts.

The auditor's opinion also mentioned a legal dispute involving the company, which is currently pending before the Appellate Division of the Supreme Court. This dispute concerns the SPBRSL 20% convertible secured bonds.

As a result of the ongoing case, regular instalment payments for the bonds have been suspended, although the company continues to make certain bond-related payments as required.

Additionally, the company has invested Tk33.91 crore in Shamim Enterprise, a business with common directors. The entire investment amount is payable to these common directors. However, no payments have yet been made to settle this liability, as noted by the auditor.

The debt includes Tk529.43 crore in long-term loans, Tk10.89 crore in short-term loans, Tk3.14 crore in lease liabilities, Tk0.32 crore in dividends payable, Tk78.29 crore categorised as other payables, and Tk9.10 crore for provisions.

The company's stock closed at Tk34 on the Dhaka Stock Exchange on Thursday, continuing its decline from a peak of Tk 320 in March 2023, when the company had posted impressive profits. This steady drop in share price has caused significant losses for investors holding the stock.

In 2022, the company's share price skyrocketed more than threefold in just two months. A DSE probe revealed that this unusual price rise was driven by a network of insiders, including the five-star resort's managing director, who engaged in coordinated trades that netted them a staggering Tk300 crore.

The investigation found that while Tk24.44 crore in profits were realised, the bulk of the gains – over Tk282 crore – remained on paper as unrealised gains, with the manipulators opting not to sell their shares during the review period.

Unrealised gains are theoretical profits that exist on paper, resulting from investments that have not yet been sold for cash. The DSE report also identified 13 placement shareholders of the resort engaging in a flurry of trading activity, including repeated buying and selling among themselves.

The company has not disclosed the reasons behind its significant loss and reduced profits during the quarter. Company Secretary Md Azaharul Mamun did not respond to phone calls or enquiries about the matter.

Industry insiders noted that political turmoil severely impacted Sea Pearl Beach Resort's business during the last quarter, forcing the company to halt operations for a significant period. Economic uncertainty and political instability further discouraged people from spending on leisure activities, reducing visitor numbers.

Additionally, this quarter is typically off-peak for tourism, which added further pressure to the company's revenue. These combined factors have contributed to a challenging period for Sea Pearl Beach Resort and the broader tourism sector, they added.