Beximco seeks Tk 4.0b lifeline

The debt-ridden Beximco Group has sought government assistance to sustain operations through cash credit (CC) of Tk 1.0 billion per month, rather than shutting down the factories under its textile division by settling the Tk 5.5-6.0 billion outstanding employee payments.

It argues that with a total financial support of Tk 4.0 billion, including average disbursements of Tk 1.0 billion per month to meet regular operational expenses, it can keep the factories running at full capacity while ensuring regular salary and allowance payments to employees.

In a letter to Labour and Employment Adviser Brigadier General (retd) Dr M Sakhawat Hussain on Sunday, Osman Kaiser Chowdhury, managing director of Beximco Textiles, appealed to reconsider the decision to shut down the Textiles and Apparel Division's export-oriented factories.

The adviser heads a council committee responsible for reviewing the business situation of the Beximco Industrial Park establishments.

Following the Awami League government's downfall in the face of a mass uprising in 2024, Beximco Group's Vice-Chairman Salman F Rahman, also a key aide to former prime minister Sheikh Hasina, was arrested.

The 11-member council committee was then formed by the interim government to address Beximco employees' dissatisfaction with salaries and allowances. Also, a Bangladesh Bank executive director was appointed as a receiver to the business group.

The receiver notified Textiles and Apparel Division officials that a decision had been made to shut down all the Beximco Industrial Park factories that had laid off their workers.

The closures will take effect once the employees' outstanding payments are settled in full by the end of this month.

Earlier, on January 30, the Beximco Textiles and Apparel Division sent a letter to the labour adviser, requesting back-to-back letter of credit (LC) facilities and Tk 4.0 billion in CC to sustain its export operations.

Osman said Beximco Industrial Park's development was a multi-year effort supported by the government and banks.

He told The Financial Express, "We acknowledge that some of our past mismanagement, compounded by unavoidable circumstances, has contributed to the current crisis and a loss of trust. We do not deny our responsibility."

Misinformation about the company has spread multiple times, both in the past and currently, he said. He also described the situation as unfortunate and regretted it.

Sunday's letter said Tk 5.5-6.0 billion would be required to close the factories after settling employees' unpaid wages.

On the other hand, if Tk 4.0 billion is provided over the next four months along with back-to-back LC facilities, the factories can continue operating at full capacity, it said.

This would also save the conglomerate from a major crisis, said the letter, adding Beximco is ready to accept any suggestion or advice from the labour adviser to deal with the situation.

Beximco officials said according to information from the Bangladesh Bank and Janata Bank, there are 31 factories under the Textiles and Apparel Division, each equipped with physical infrastructure and operational setups.

The factories owe Janata Bank Tk 280 billion, but it was incorrectly reported as Tk 450 billion, they said.

Beximco's Textiles and Apparel Division has been the biggest exporter for many years through Janata Bank as a single client, with an average monthly export value of $32 million over the last six years, while the amount reached the highest at $59 million in 2022, Sunday's letter noted.

According to the conglomerate's data, the Textiles and Apparel Division employed 45,000 employees in July last year, which has since decreased to 35,000.

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