Ring Shine Textile faces EPZ lease cancellation over $16.19m in dues

Infographic: TBS

The Bangladesh Export Processing Zones Authority (BEPZA) has begun proceedings to cancel six additional lease agreements of Ring Shine Textile Limited for failure to clear outstanding dues.

The Dhaka EPZ office recently issued a notice expressing its intention to terminate the lease of Plots No 157–163. Earlier, on 20 February 2025, BEPZA had cancelled leases for Plots No 231-236 on similar grounds.

As of January 25, 2025, Ring Shine's outstanding dues to BEPZA stood at approximately $16.19 million, against a deposit of only $254,945. Despite repeated reminders, the company has not cleared the arrears. The last payment of  $30,000 was made on 17 May 2025. BEPZA has warned that the leases may be cancelled without further notice if a satisfactory response is not received within seven days.

Yesterday, the company's share price closed at Tk3.10 on the Dhaka Stock Exchange.

Ring Shine attributed the delays to a global market slowdown and liquidity constraints in the textile sector. It has submitted a restructuring proposal under a policy support framework of Bangladesh Bank, offering to settle 50-60% of principal dues through the sale of idle assets, with the remainder to be repaid over 10 years without surcharge.

The company said it has confirmed export orders worth about $7 million and arranged bank facilities for raw material imports. It warned that cancelling Plots No 157-163 – which house 292 circular knitting machines handling export orders valued at $8.5 million – would disrupt its integrated production chain linked to dyeing and finishing units at Plots No. 250–256.

Ring Shine said lease termination would also affect 206 workers in its interlock division and create nearly $1 million in service-related liabilities, raising risks of labour unrest.

As an alternative, the company proposed monetising long-idle Plots No 237-243 and sought one year to complete the process, alongside a 10-year repayment schedule.

Managing Director Auniruddho Piaal said surrendering unused assets would help settle dues without halting operations. Meanwhile, the Bangladesh Securities and Exchange Commission recently rejected the company's request to release $1 million from its IPO fund due to a lack of shareholder approval.

Listed in 2019, Ring Shine is now in the 'Z' category. Its paid-up capital stands at Tk500.31 crore with 50,03,13,043 shares. As of 31 January 2025, sponsors held 36.46%, institutional investors 5.38%, foreign investors 0.31%, and general investors 57.85%, according to DSE data.