United Commercial Bank (UCB) has decided to auction the assets of listed company Saif Powertech to recover Tk 517.74 crore in outstanding loans.

The bank published an auction notice on its website on March 20 and invited potential buyers to submit price quotations by April 24. The auction will be conducted as per the provisions of the Money Loan Court Act, 2003.

According to the auction notice, UCB is auctioning the assets of three companies to recover a total of Tk 755.24 crore in loans. All the auctions have been issued from the bank’s Mohakhali branch.

Apart from Saif Powertech, the other two companies up for auction are E-Engineering Limited, which has an outstanding loan of Tk 197.69 crore, and Maxon Power Limited, which has an outstanding loan of Tk 39.81 crore.

The loan amount includes interest calculated till March 18. Under the auction, two mortgaged lands located in Narayanganj and Chittagong will be sold, totaling 57.57 percent. The notice said that these properties will be sold to repay the loan.

A senior official of UCB’s Mohakhali branch told The daily morning glory on condition of anonymity that despite repeated requests from the bank, the companies have not repaid the loan for a long time. Therefore, legal steps like auction have been taken as per banking rules to recover the dues.

Saif Powertech’s Managing Director Tarafdar Md. Ruhul Amin is also the Chairman of E-Engineering Limited and Maxon Power Limited. Attempts to contact him were unsuccessful. His mobile phone was found switched off.

Meanwhile, Saif Powertech’s Chief Financial Officer Hasan Reza did not receive calls even though he was contacted several times for a response.

Saif Powertech is mainly involved in operating the container terminal at the Chittagong port. The company handles about 58 percent of the port’s total container operations. In addition, the company also operates containers at Mongla and Pangaon ports.

In addition to operating the port, the company is also involved in the generator and battery business. Saif Powertech has six subsidiaries in various sectors.

According to the annual report for the fiscal year 2023-24, Saif Powertech’s long-term debt is Tk 1,482 crore, of which 83 percent is with the National Bank. In addition, its short-term debt is Tk 374 crore, of which 85 percent is due to UCB.

Saif Powertech had recommended a 1 percent cash dividend for its shareholders for the fiscal year 2023-24.

However, the Dhaka Stock Exchange (DSE) downgraded the company to the ‘Z’ category due to its failure to pay dividends within the stipulated time.

The company’s consolidated revenue increased by 38 percent to Tk 483 crore in the fiscal year 2023-24. Consolidated net profit also increased slightly to Tk 25.81 crore.

At the end of the fiscal year, the company’s consolidated earnings per share (EPS) was Tk 0.70, net asset value per share was Tk 17.01 and net operating cash flow per share was Tk 1.88.

The company’s share price on the Dhaka Stock Exchange on Thursday (March 20) was Tk 11.80, up 0.85 percent from the previous day.

Despite the company’s revenue growth and operating capacity, debt defaults have raised concerns among investors and shareholders.

According to stock market analysts, Saif Powertech’s downgrade to the ‘Z’ category mainly reflects its ongoing financial crisis and debt repayment challenges.

Despite playing an important role in the operation of the country’s ports, the debt problem is creating uncertainty over the company’s future operations.