Aftab Auto-linked firms face asset auction over Tk500cr loan default
The auction comes amid intensified efforts by banks – Southeast and NCC – to recover non-performing loans from defaulters, especially within corporate groups with long-standing banking relationships, according to sources within the banks
Banks are set to auction assets of Navana Batteries Ltd, a subsidiary of publicly listed Aftab Automobiles, and Navana Real Estate Ltd, in which Aftab Auto holds a 20% stake, to recover Tk513 crore in defaulted loans.
The auction comes amid intensified efforts by banks – Southeast and NCC – to recover non-performing loans from defaulters, especially within corporate groups with long-standing banking relationships, according to sources within the banks.
A senior Southeast Bank official, requesting anonymity, said Aftab Auto has long been a client, but mismanagement and weak leadership have pushed most of its companies into losses and loan defaults.
He said the bank has adopted a tougher stance on loan recovery, called an auction, following the Money Loan Court Act against two entities.
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"There's still an opportunity for the forms to repay and exit default status," he said, warning that continued default would hurt their businesses as other banks would withhold support.
Aftab Auto's Managing Director, Saiful Islam, could not be reached for comments. Shafiul Islam Kamal, founder of Navana Group, serves as the chairman of these companies.
Auction for Navana Real Estate's assets
Southeast Bank has called an auction to sell off the mortgage assets of Navana Real Estate Limited, which defaulted on loans amounting to Tk500 crore as of 12 July.
The bank has invited bids for 526 decimals of mortgaged land, with the submission deadline set for 6 August, according to the auction notice published in a newspaper on Wednesday.
According to the annual report of Aftab Auto for FY24, Navana Real Estate posted an earnings per share (EPS) of Tk5.02 and a net asset value (NAV) per share of Tk75.29 in the fiscal year 2022-23. But it did not disclose the financial result for FY24.
Aftab Auto stated in its report that it holds 60 lakh shares of Navana Real Estate Limited, each with a face value of Tk10, acquired at a cost of Tk3.33 per share. Since Navana Real Estate is not a publicly listed company, its current market value cannot be determined.
Auction for Navana Batteries' assets
Meanwhile, NCC Bank has also initiated an auction process to recover Tk13 crore in defaulted loans from Navana Batteries Ltd. Aftab Auto owns 99.95% of this company.
The bank will auction 104 decimals of mortgaged land, and interested bidders must submit their proposals by 7 August, according to the auction notice published on Wednesday.
Earlier in February this year, Agrani Bank attempted to auction the assets of Navana Batteries to recover defaulted loans amounting to Tk125 crore. However, the auction failed to attract buyers. As a result, the bank filed a case against the company in the Money Loan Court, according to a bank official who spoke on condition of anonymity.
Recently, Janata Bank filed a case against the chairman and directors of the company over a defaulted loan of Tk72.94 crore.
A Money Loan Court in Dhaka has summoned the chairman and directors of Navana Batteries to appear for a hearing on 17 July through issuing notices, which were published in newspapers on 15 July. The court also warned that it will announce the verdict in absentia, as stated in the notice.
In FY24, Navana Batteries reported revenue of Tk34.58 crore, marking a 75% year-on-year increase. The company returned to profitability with a net profit of Tk39 lakh, compared to a loss the previous year. Its NAV per share stood at Tk40.75.
According to the financial statements, Navana Batteries has total outstanding loans of around Tk500 crore, with its top lenders being Dutch-Bangla Bank, Agrani Bank, and Southeast Bank.
Meanwhile, Aftab Automobiles reported a consolidated loss of Tk10.69 crore in the July-March period of FY25. However, the consolidated revenue jumped by 80% to Tk57.92 crore during the period.
On the Dhaka Stock Exchange, Aftab Auto shares declined by 3.96% to close at Tk36.40. Earlier, from 24 June to 15 July, the stock has gained 39.33%. The company remains in the Z category due to its failure to disburse the approved 10% cash dividend for FY24.
