Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The High Court has asked the Investment Corporation of Bangladesh (ICB) to give Sea Pearl Beach Resort & Spa an additional 10 years' time to pay off dues that piled up to Tk 4.38 billion until April.
According to a court order received by the ICB, it should allow the Sea Pearl to clear the interest plus the principal amount in 10 equal installments without imposing any more interest on bonds worth Tk 3.25 billion.
The Sea Pearl has paid only Tk 730 million against the bonds issued to the ICB in 2017.
The ICB chairman and other officials refused to talk on the court order but drew attention to the dire situation that the state-run organisation is in now.
"The corporation itself has been facing a severe fund crisis and is unable to play its due role [supporting the stock market]," said ICB Managing Director Md. Abul Hossain.
The investment bank wrote to the central bank on Thursday, seeking Tk 50 billion at a lower-than-market interest rate. The money, if granted, will be used to make investments in the equity market and to pay back loans.
"We will place the court order at the board meeting to decide the next course of action," said Mr Hossain.
The ICB has become overburdened with debts received from banks and other sources at high interest rates to support the stock market since the 2010 debacle.
It received Tk 112.13 billion from different state-run and private commercial banks and other sources between July 2010 and June 2023 and invested Tk 128.49 billion in portfolio securities during the period.
Sea Pearl Beach Resort that began operation in 2015 issued bonds worth Tk 3.25 billion in 2017 at a 10 per cent interest rate to pay off bank loans. The ICB fully subscribed the debt securities.
The company of the travel & leisure sector was supposed to begin repayments semi-annually from April 2020. But it failed to do so as the pandemic hit hard hotel business. It then sought interest waiver and went to the High Court to stop being labelled as a defaulter.
Earlier, both the parties reached an agreement that 20 per cent of the bonds would be converted into shares.
Amid a legal battle, the securities regulator approved the conversion of bonds to shares at Tk 94 each to facilitate payment of Tk 1.2 billion. However, it asked the Sea Pearl to withdraw all cases that it had filed.