Western Marine Shipyard, once a top shipbuilder, remains tangled in default loans to three banks and now unable to recover from the situation despite availing special facilities.
Presently, the company grapples with a default loan totaling Tk 1495 crore 87 lakh. This includes Tk 505 crore 90 lakh in Bank Asia Agrabad Branch and Tk 895 crore 50 lakh in National Bank Agrabad Branch.
Western Marine Shipyard Limited is the top ranked company among the export-oriented shipbuilding companies, according to Dhaka Bank Ltd Agrabad Branch.
The company has established world-class expertise, eco-friendliness and reputation in manufacturing car ferries, passenger ships, fishing boats, barges, fishing trawlers, tug boats, etc. at home and abroad since 2000.
Mentionable, Dhaka Bank Ltd also provided loan facilities for their business expansion.
In the year 2016-17, when the business of the company suffered a downturn, the company failed to pay its dues to the bank regularly. However, the government allows for rescheduling of loans.
Due to institutional failure, Western Marine could not utilize the opportunity, sources said. As of last August 28, the default loan amount of Dhaka Bank’s Agrabad Branch near Western Marine Shipyard is Tk 94 crore 47 lakh 18 thousand 547.
Against the loans, there is a total of 4,300 square feet space of head office and a ship named Western Cruise as mortgage. To collect the loans, an auction will be held at the Agrabad office on October 5.
According to National Bank sources, due to institutional failure, Western Marine could not ensure proper use of loans. As a result, National Bank Agrabad Branch has a defaulted loan of Tk 895 crore 50 lakh.
Unfortunately, the shipyard company failed to oversee the appropriate utilization of loans, leading to a default of Tk 895 crore 50 lakh at the National Bank Agrabad Branch.
Moreover, the shipyard company has defaulted on a loan amounting to Tk 505 crore 90 lakh in Bank Asia. A case (No. 600/22) was filed in the Chattogram Money Debt Court at the end of the last year, and the proceedings for the case are currently underway.
Bank and Industry insiders say the world's shipbuilding nations --Japan, South Korea, China, Vietnam and Singapore-- have the largest number of large-scale shipbuilding orders while medium-sized shipbuilding countries are not getting many orders. Besides, several Bangladeshi companies are not able to deliver the ships on time as there has been a recession in this sector for several years. A case is currently underway in the International Court.
With buyers reluctant to place new work orders, global ship purchasers are going for alternative countries instead of Bangladesh. Consequently, the shipbuilding industry is experiencing a slowdown, failing to meet initial expectations and grappling with financial challenges in the sector, they added.
Seeking anonymity, an official of Dhaka Bank said, “We are very concerned about the loan of Western Marine Shipyard Ltd because the amount of loans in the banking sector is constantly increasing but they have not had much business in the last five years.
He added, “They are not paying any money on the other hand they repeatedly promised to pay some portion of the loan. Now the bank will resort to the law to collect the dues.”
Sohail Hasan, Managing Director of the Western Marine Shipyard Limited, was contacted several times over phone in this regard; he did not pick up the phone.
