Phoenix Finance auctions Appollo Ispat’s Gazipur assets

Phoenix Finance and Investments Ltd, a lender to the failing producer of once popular corrugated steel "Rani Marka Dheutin", has initiated its move to auction the company's mortgaged assets in Gazipur to recover default loans. 

The non-bank financial institution in its newspaper advertisement, dated 3 November, for the auction said the listed steelmaker owes nearly Tk71.5 crore to them in forms of principal and interests accrued. 

The mortgaged assets include 228 decimal land in Bhurulia, Gazipur Sadar, along with buildings and all installations there. 

Md Rafique, managing director of Appollo Ispat Complex, claimed that he was unaware of the notice. 

"There had been some problems with the non-bank financial institution regarding unpaid loans," he said. 

Phoenix Finance Managing Director SM Intekhab Alam did not respond to the repeated phone calls and SMS for a comment. 

However, the asset in Gazipur that came under auction schedule, is not Appollo Ispat's key facility as its factory complex is at Shimrail in Siddhirganj, Narayanganj. 

Appollo Ispat Complex began commercial production of corrugated steel in 1997 and its "Rani Marka" ascended to a top position in the local market. 

The company went public in 2013 to raise Tk220 crore from investors, mainly to repay bank loans with Tk150 crore and the remaining amount was invested for capacity expansion. 

It was generating nearly Tk500 crore in annual revenue before going public. 

But due to a high debt burden, some capital market investors opposed its listing and even the then Finance Minister wrote to The Bangladesh Securities and Exchange Commission (BSEC) not to approve Appollo Ispat Complex's initial public offer. 

However, the BSEC let the company enter the bourses and the company proved that the skeptics were right. 

Its sales dropped to below Tk160 crore for the first nine months of the fiscal 2018-19, and at the year end, the company generated more than Tk90 crore in losses, much higher than the company's peak annual profit of Tk75 crore in 2016. 

For the last two years, the company is not posting its financial updates and there is no general meeting of shareholders. 

According to the mid-2018 information by the Dhaka Stock Exchange, Appollo Ispat's long-term loans were Tk70.61 crore, while short term-loans were over Tk235 crore. 

The company did its expansion at Narayanganj factory, but it is not in production due to the financial crisis. 

Evana F Mohammad, a director of the company, claimed in a media interview last year that embezzlement by a former director who was looking after the company and later fled the country ruined it all and the company was in need of more than Tk700 crore to regain the ground. 

Appollo Ispat shares collapsed below Tk2.5 in 2020, from its debut peak of Tk41. 

And, without any apparent development it bounced back to over Tk10 earlier this year, during the hyper bull-run.