The long-closed factories of Beximco Textiles Limited are set to reopen under a tripartite lease agreement. The agreement includes Japanese company Revival Project Limited, Janata Bank and Beximco Group. This information has been revealed by sources in the Ministry of Labour on Sunday .
The Ministry of Labour said that the initiative has received the policy support of the Bangladesh government, which aims to revive one of the largest textile operations in the country, while creating employment for about 25,000 workers. Revival Project Limited will initially arrange a back-to-back LC of US$20 million from a foreign bank,Economist Shahadat Hossain Siddiqui said, "I think the government is giving policy support to Beximco because it has emerged with a good mind. There is a chapter that Beximco will not be able to take a loan from the government alone. But later it is said that since the Revival Project is investing and its potential is likely to exceed about US$100 million."
Sources in the Ministry of Labour said that the initiative has received the policy support of the Bangladesh government, which aims to revive one of the largest textile operations in the country.
Bangladesh's Garments Revival Project Limited will initially arrange a back-to-back LC of US$20 million from a foreign bank, which will provide capital to Beximco Textiles to fulfill the purchase order of global garment giant Inditex.
The company, which has been idle since February after months of workers' protests over unpaid wages, will then produce garments to fulfill the order.
Beximco Group has officially agreed to the revival, said Beximco Managing Director Osman Kaiser Chowdhury, "After 10 months of tireless efforts, we are moving forward with the reopening of the factories. The government also understands that the factories need to be kept open. The government has a principled agreement in this regard. To facilitate the reopening of Beximco Textiles, Janata Bank will reschedule defaulted loans of about Tk 35,000 crore.
The Ministry of Labour is coordinating the reopening of Beximco Textiles factories through the execution of a tripartite lease agreement, which was approved in an inter-ministerial meeting chaired by Labour Secretary AHM Shafiquzzaman on July 22.
Officials from Bangladesh Bank, Janata Bank, Bangladesh Investment Development Authority (BIDA), Revival Project Limited and Beximco Textile were present at the meeting.
Sources said that Janata Bank and other lenders will reschedule the defaulted loans of Beximco Textile, totaling about Tk 35,000 crore. Out of this, about Tk 23,000 crore is in default with Janata Bank alone.
The government has clearly stated that no new loans will be provided by the government to restart Beximco Textile's operations. However, various ministries and agencies of the government will provide the Japanese company with necessary support in policy and regulatory matters.
The document said as per the lease agreement, Revival Project will receive a service charge from the factory's income and the remaining profit will be used directly to repay the rescheduled loans.
Sources said to restart production activities, Bangladesh Bank will relax the existing policies and provide necessary export-related banking facilities to Revival Projects Limited in light of the tripartite agreement. And the Ministry of Finance and Bangladesh Bank will take necessary measures to provide export-related credit facilities.
Labour Secretary AHM Shafiquzzaman said, "What the owners of Beximco have done politically or not is not our concern. We have decided to reopen the Beximco Textile factories considering the government's investment, bank investment, employment and export income. Because these Beximco factories are fully compliant, the machinery is also advanced.
The government has earlier given Beximco an interest-free loan of Tk 585 crore to pay outstanding salaries. In addition, the company has a loan of Tk 23,000 crore from Janata Bank alone. The company has a loan of about Tk 35,000 crore from the banking sector, including other banks.
