Bank Asia to auction off SS Steel assets to recoup Tk168cr debt
Company says it will address the auction notice through its legal department
Bank Asia has announced plans to auction the assets of publicly listed SS Steel Limited in a bid to recover an outstanding loan of Tk167.56 crore.
An auction notice, published in daily newspapers today, invited interested buyers to submit price quotations by 30 January. The auction follows provisions of the Money Loan Court Act, 2003.
As per the notice, 148.5 decimals of land located in Gazipur, along with the factory building and the machineries inside are all up for auction. All the assets are owned by SS Steel.
Sources at the bank said the company initially took a demand loan for working capital. But, despite multiple notices, SS Steel failed to make timely loan installments, prompting the auction proceedings.
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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 or WhatsApp messages.
The queries were later responded to by the company via WhatsApp.
The company, in its statement, 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.
Today, the company's shares closed at Tk8.50 on the Dhaka Stock Exchange, marking a 1.16% decline from the previous session.
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.
Among the lenders, National Bank is the largest, with an exposure of Tk392 crore, followed by United Commercial Bank with Tk211 crore, AB Bank with Tk188 crore, and Trust Bank with Tk138 crore.
In November 2023, the Bangladesh Securities and Exchange Commission (BSEC) had raised concerns regarding the escalating liabilities of SS Steel. However, the BSEC is yet to take any action against the company.
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. The dividend is yet to be disbursed to shareholders.
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.
