Globe Group to sell edible oil unit to repay bank loans

Globe Pharmaceuticals Group of Companies is set to sell its edible oil unit, Globe Edible Oil Ltd, to adjust bank liabilities.

Industry insiders said Abul Kashem, chairman of the conglomerate Abul Khair Group, is likely to acquire the loss-making edible oil firm for approximately Tk 2,000 crore.

Samir Al Rashid, a director of Globe Pharmaceuticals Group of Companies, said the acquisition has not yet been finalised. He also did not wish to disclose the financial details of the sale.

"It is just a transfer of liabilities, most of which piled up as we were unable to pay interest to banks," he said.

"We can't run the company even if we want to because of S Alam Group's previous interference. The liabilities are increasing day by day," he said, adding that the company had been facing this situation for the past 15 years.

Globe Edible Oil Ltd has around Tk 1,300 crore in liabilities with Islami Bank's Gulshan branch (Circle 01) and has now become a defaulted account. It is the branch's largest borrower.

To date, the branch has disbursed Tk 3,100 crore in loans, of which around Tk 2,750 crore have turned sour.

Officials of the bank also divulged some information about the acquisition plan, which includes an initial repayment of Tk 300 crore and rescheduling of the remaining liabilities, with a portion of the interest waived.

Contacted, Md Omar Faruk Khan, managing director (current charge) of Islami Bank Bangladesh, said Globe Edible Oil Ltd had informed the bank that it would be sold off to repay the loans.

"We heard that Abul Khair Group is going to buy the firm, but neither party has formally informed us yet," he said.

A senior official of Abul Khair Group, requesting anonymity, told The Daily Star that the initiative did not relate to the Abul Khair Group, but was a personal endeavour of its chairman.

However, attempts to reach Abul Kashem for comment were unsuccessful.

Globe Pharmaceuticals Group of Companies Ltd, the parent of Globe Edible Oil Ltd, managed to resist what its chairman described in September last year as a "hostile takeover" since S Alam Group's influence ended with the fall of the Sheikh Hasina-led government last August.

The chairman, Md Harunur Rashid, also alleged that S Alam Group used its influence at Islami Bank to force him to sell the cooking oil business to the Chattogram-based conglomerate. He also said Globe Edible Oil Ltd was forced to stop all operations due to illegal interference by S Alam.

Globe director Rashid told this newspaper that they lost more than Tk 6,000 crore due to S Alam Group's illegal interference through Islami Bank and other financial institutions in which the controversial conglomerate held sway.

Globe entered the edible oil market through offerings of sunflower oil to cater to the increasingly health-conscious middle-income segment of the population.

He said Globe had applied to Islami Bank in 2011 for a loan to import machinery and for working capital to set up the edible oil company. The bank disbursed Tk 282 crore to the company in the first phase.

However, there was a change in ownership at Islami Bank during the construction of the factory, which stalled funding, causing the company to incur losses, according to Rashid.