S Alam Cold Rolled Steels' market cap plunges 63% since July
As of 9 July, the company’s share price was Tk26.1, with a market capitalisation of Tk257 crore. By the close of trading on Thursday (26 December), its market capitalisation had significantly declined to Tk95.41 crore
S Alam Cold Rolled Steels Ltd, the only listed firm under the controversial S Alam Group, has seen its market capitalisation plummet by over 63% — equivalent to Tk 162 crore — since 9 July.
According to data from the Dhaka Stock Exchange (DSE), as of 9 July, the company's share price was Tk26.1, with a market capitalisation of Tk257 crore. By the close of trading on Thursday (26 December), its market capitalisation had significantly declined to Tk95.41 crore
On Thursday, the company's share price dropped by 8.49%, falling below its face value of Tk10 to Tk9.7, following reports of a factory closure. However, the company has yet to officially disclose this information to shareholders via the stock exchanges, according to market insiders.
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Al-Mamun, the company secretary of S Alam Cold Rolled Steels, told TBS, "Factory operations have been disrupted due to a shortage of raw materials — caused by challenges in opening letters of credit as banks were uncooperative. However, I am not aware of an official notification of a shutdown. That is why, the company has not yet made any disclosure to the bourse."
On 24 December, S Alam Group announced through a notice that it had shut down its eight sugar, steel, and bag factories after being unable to import raw materials due to a lack of cooperation from banks.
The closed factories are S Alam Refined Sugar Industries, S Alam Bag, S Alam Cold Rolled Steels Limited, Infinity CR Strips Industries Limited; steel sector companies NOF, Chemon Ispat, S Alam Steel, and Galco, reads the notice signed by Mohammad Borhan Uddin, head of HR and Administration at S Alam Group.
S Alam Group said in the notice, "Due to unavoidable circumstances, the factories will remain closed from Wednesday [25 December] until further notice as per the authorities' instructions."
Since the ouster of Sheikh Hasina on 5 August amid a student-led mass uprising, the Chattogram-based group has been finding it hard to keep its factories running, as banks have taken a hard stance in dealing with it.
Saiful Alam Masud, largely known as S Alam, a highly influential figure in Bangladesh's financial sector and chairman of S Alam Group, was previously known to be a controlling force behind seven banks.
He allegedly drew over Tk1 lakh crore from various banks during Hasina's more than 15-year regime.
Loans surge to 80% of total assets and properties
According to the unaudited financial statement for the July-March period of FY24, S Alam Cold Rolled Steels reported total loans amounting to Tk2,036 crore, reflecting a 44% increase compared to the same period in the previous year.
The loan amount is equivalent to 80% of the company's total assets and 1,129% of its shareholders' equity.
Of the total loans, S Alam Cold Rolled Steels borrowed Tk639 crore from Janata Bank, Tk377 crore from Exim Bank, and Tk1,019 crore from Islami Bank.
During the third quarter of FY24, the company recorded revenue of Tk388 crore and a net profit of Tk2.50 crore, compared to Tk474 crore in revenue and Tk5.69 crore in net profit during the same period the previous year.
Notably, the company has yet to publish its audited report for FY24.
