UCB to auction Saif Powertec assets to recover Tk518cr loan

Infographics: TBS

United Commercial Bank (UCB) has announced its decision to auction off the assets of Saif Powertec, a publicly listed company, to recover an outstanding loan of Tk517.74 crore.

The bank published the auction notice on its website on Thursday (20 March), inviting potential buyers to submit price quotations by 24 April. 

The auction will be conducted following the provisions of the Money Loan Court Act, 2003.

According to the notice, UCB is auctioning the assets of three companies to recover a total of Tk755.24 crore in loans, all of which were issued by the bank's Mohakhali branch. 

In addition to Saif Powertec, the other two companies are – E-Engineering Limited, which owes Tk197.69 crore, and Maxon Power Limited, with an outstanding loan of Tk39.81 crore. 

The loan amounts include interest calculated up to 18 March.

The auction will involve the sale of two mortgaged land parcels, measuring a total of 57 decimals, located in Narayanganj and Chattogram. These properties will be sold to recoup the unpaid loans, according to the notice.

A senior official from UCB's Mohakhali branch, on condition of anonymity, told TBS that the companies have failed to make any loan repayments for several years, despite repeated reminders from the bank. As a result, UCB has resorted to legal measures, including asset auctions, in line with banking regulations, to recover the dues.

Saif Powertec's Managing Director, Tarafder Md Ruhul Amin, who also serves as the chairman of the other two said firms, could not be reached for comment. His mobile phone was found to be switched off. 

Saif Powertec's Chief Financial Officer, Hasan Reza, did not respond to repeated phone calls or a WhatsApp message seeking his comments on the matter.

Saif Powertec is primarily engaged in operating container terminals at Chattogram Port, handling approximately 58% of the port's container operations. 

It holds the distinction of being the country's only terminal operator and also manages container operations at Mongla and Pangaon ports. Beyond its port operations, the company is involved in the generator and battery business. 

Additionally, Saif Powertec has six subsidiary companies operating across various sectors.

According to its annual report for FY24, Saif Powertec's long-term loans totalled Tk1,482 crore, with 83% of this amount owed to the National Bank. Its short-term loans stood at Tk374 crore, of which 85% was owed to UCB.

Financial performance

For the fiscal year 2023-24, Saif Powertec recommended a 1% cash dividend for its shareholders. However, the company failed to meet its dividend payment obligations within the stipulated time, leading to its downgrade to the Z category by the Dhaka Stock Exchange.

In FY24, Saif Powertec reported a 38% growth in consolidated revenue, which reached Tk483 crore. Its consolidated net profit also saw a slight increase, rising to Tk25.81 crore compared to the previous year.

At the end of FY24, its consolidated earnings per share (EPS) of Tk0.70, net asset value per share of Tk17.01, with a net operating cash flow per share of Tk1.88.

On Thursday (20 March), the company's shares closed at Tk11.80 on the Dhaka bourse, marking a 0.85% increase from the previous trading session.

Despite its operational strengths and revenue growth, Saif Powertec's financial challenges, particularly its loan defaults, have raised concerns among investors and stakeholders. The company's downgrade to the Z category reflects its ongoing struggles to meet financial obligations, casting a shadow over its otherwise significant role in the country's port operations, according to the market insiders.