An initiative has been taken to reopen BEXIMCO Group’s closed factories. To restart operations, Japanese company Revival is set to invest Tk 2.45 billion initially, with US-based firm Ecomili partnering in the process.
The government has approved their joint investment plan to reopen the factories. What now remains is a tripartite agreement between Revival, Janata Bank, and BEXIMCO, according to the Ministry of Labour and Employment.
BEXIMCO’s major international buyers include Zara, Marks & Spencer, Target, American Eagle, Pull & Bear, and Bestseller.
Due to strong demand from these brands, efforts are underway to relaunch the 15-factory BEXIMCO Textiles Division, which shut down after the August’s political transition last year.
Revival Project Ltd. and US e-commerce company Ecomili plan to invest US $20 million to reopen them. A written proposal has already been submitted to the Labour and Employment Ministry in this regard.
Reportedly, a network of BUET graduates living in the US, known as the BUET Investment Network, has also assured the government that it will help secure an additional US $100 million in loans to support BEXIMCO’s reopening.
Speaking about the initiatives, BEXIMCO Managing Director Osman Kaiser Chowdhury told Prothom Alo, “We are defaulters with Janata Bank. Revival wants to understand how and to what extent the bank will reschedule our loans. That’s why we’ve had meetings with them. Now it’s time for a tripartite deal.”
Sources said Revival submitted an Expression of Interest (EoI) to the government in June to operate BEXIMCO Textiles. Since BEXIMCO owes Janata Bank a large debt, Revival sought the bank’s policy consent. In response, BEXIMCO submitted a Letter of Comfort to the ministry.
The Labour Ministry said the government previously gave BEXIMCO Tk 5.85 billion in interest-free loans to clear worker dues, but repayment remains uncertain. With the factories closed for six months, much of the machinery is going out of order.
On 21 August, outgoing Labour Secretary AHM Safiquzzaman chaired a multiparty meeting on the matter.
Speaking to Prothom Alo, he said that the Advisory Council decided to reopen these factories to sustain the economic momentum. BEXIMCO has valuable machinery that is decaying. Restarting the plants will generate significant employment, which is the government’s priority.
What Revival wants
Revival stated that the factories will reopen under a tripartite lease agreement. To do so, BEXIMCO’s defaulted loans must be rescheduled.
Revival will take a share of earnings as a service fee, while the rest will go toward repaying rescheduled debts. To finance operations, Revival will arrange a $20 million back-to-back letter of credit (LC) from foreign banks.
To ensure transparency, it will hire a global audit firm, as well as rebuild buyer confidence, recruit skilled workers, and ensure sustainable production.
Revival Project Ltd.’s CEO Mohammad Faisal Huda, currently in Japan, told Prothom Alo over phone, “We expect the tripartite agreement within two weeks. We don’t want another Hall-Mark scandal. By reopening BEXIMCO’s factories, we aim to create 25,000 jobs and retain world-famous brands as buyers.”
Government’s stance
Sources said the government had already given BEXIMCO Tk 5.85 billion to pay workers, including Tk 5.75 billion from the Finance Division.
The Finance Division has asked how BEXIMCO or Revival plans to repay this. For rescheduling loans, both the Finance Division and the Financial Institutions Division need to issue no-objection letters (NOCs). Both have agreed, considering the importance of reopening the factories.
The Bangladesh Investment Development Authority (BIDA) informed the ministry that if foreign investors join, banks are allowed to extend short-term loans. This means even if Janata Bank declines, other banks can step in.
On 19 August, Janata Bank held a meeting with Revival and BEXIMCO, where they requested Bangladesh Bank’s NOC for loan rescheduling and opening LCs. Bangladesh Bank has assured full cooperation.
Former BKMEA president Md Fazlul Haque termed the initiative as a positive one.
He told Prothom Alo that all parties, including the government, should support the initiative. Reopening the factories will help recover bank loans and create much-needed employment opportunities.