Appollo Ispat Complex Limited, which once produced widely popular ‘Rani Marka Dheutin’ (corrugated iron sheet), has halted its production two years back due to lack of a proper management team and absence of board members.
Mohammed Shoeb, vice chairman of the publicly traded company, in a letter sent to Bangladesh Securities and Exchange Commission (BSEC) Chairman on August 14 this year said that the factory has been out of production for the last two years due to lack of a proper management team and absence of board members.
Many of the former employees have grossly misappropriated the company’s funds and acted against the interests of the company, he claimed in the letter.
The company said that its total debt currently stands at Tk 1,100 crore, with approximately Tk 900 crore in loans (including penal interest) and Tk 200 crore worth of other liabilities. The listed company, however, did not give details about its loans and other liabilities.
Appollo Ispat has not given any financial update since FY18, and its production has remained shut since FY19. As of mid-2018, the company’s long-term loans were Tk 70.61 crore, while short-term loans were over Tk 235 crore.
Appollo Ispat’s founder chairman Deen Mohammad died on April 27, 2021. Moreover, founding managing directors Ansar Ali and Abdur Rahman, director and deputy managing director died during the Covid-19 pandemic.
Mohammed Shoeb said, “We are trying to find strategic partners or investors who can join hands with us to restructure the company.”
AICL has a huge financial burden, which is approximately Tk 900 crore, including penal interest, and the company also has other liabilities of Tk 200 crore.
The actual value of the company would be approximately Tk 1,400–1,500 crore. “Given the highly complicated situation of our company, it is not possible to meet all financial obligations unless we get a strategic investor,” said Shoeb.
The company also urges the stock exchange and stock market regulator to consider its position and waive the surcharges, fines, and listing fees until the entire matter is brought to a manageable situation.
Company’s immediate-past managing director Rafique fled the country without informing the board. “It caused further damage to the company and amplified the financial crisis, which we are all still trying to minimize,” Shoeb said in the letter.
“We have taken legal action against Rafique and former CFO Rajib Hossain for their alleged criminal activities.
“We are in the process of discussing the issue with some investors who may show interest in investing in Appollo Ispat. The overall process to complete financial and corporate restructuring along with finding a strategic investor may take six to nine months, he said.
Appollo Ispat Complex started commercial production of corrugated steel in 1997, and its ‘Rani Marka Dheutin’ hit the local market. It had been generating nearly Tk 500 crore in annual revenue before going public.
The company’s manufacturing plant owns 1461.4 decimals of land at Shimrail in Narayanganj.
The company went public in 2013 to raise Tk 220 crore from investors, mainly to repay bank loans of Tk 153 crore, while Tk 60 crore was spent on project development and the rest on IPO expenses.
The company at the time had announced that it would install an environmentally-friendly German technology-based non-oxidizing furnace unit for manufacturing lead-free corrugated iron sheet.
The new project was expected to come into commercial production in mid-2014. But due to high debt burden, some capital market investors opposed its listing, and even the then finance minister wrote to the BSEC not to approve Appollo Ispat Complex’s initial public offering.
However, the BSEC let the company enter the bourses, and the company proved that the skeptics were right.
Any listed firm is transferred to Z category if the company fails to declare a cash dividend for two years in a row from the date of the last dividend, as per the order.
The company is currently trading in Z category due to non-compliance with securities laws, including non-disclosure of financial reports.
In November 2021, Phoenix Finance and Investments Ltd initiated a move to auction Appollo Ispat’s mortgaged assets in Gazipur to recover default loans.
