IT firm Intech to lease out idle land to mitigate liquidity crisis

Intech Limited is going to lease out its idle 30 acres of land in Mymensingh in order to mitigate the liquidity crisis the company has been going through for a long time.

To expand its business, the company had earlier sought bank loans, but to no avail.

Also, it had borrowed Tk35 lakh from each of its ten directors.

About the lease

Company Secretary Md Emran Hossain Niloy told The Business Standard that Intech once used the land in Mymensingh to run a fish farm there and cultivate a variety of fishes.

"But later, the project got abandoned as it was not in line with the articles of association of the company, and since then, the land has remained unused for a few years," he added.

Now, the land will be leased out to Biswas Agro Fisheries till February 2028, as Intech has no plan to restart its fish farming business at least in another five years.

This lease agreement will bring Intech Tk21 lakh annually – Tk70,000 from each acre. 

Emran Hossain said the company is in need of fresh funds so that it can expand its existing ISP business and also develop its software business. 

"As the company did not get anywhere with bank loans, it decided to lease out its land that has been sitting idle for years," he added.

Why the liquidity crisis

Intech Limited, publicly listed since 2002, turned into a poorly performing company in the early 2020. In the fiscal 2020-21, it incurred heavy losses.

Some people involved in S Alam Group and KDS Group, and entrepreneurs from the IT sector joined the Intech board by buying shares from the secondary market. Later, the board was reconstructed under the new management in 2021.

The company's Founder Chairman ATM Mahbubul Alam, and Directors Shadika Mahbub and Anisuzzaman resigned from their respective posts. 

According to sources, the company is now running under the new management that holds around 27% shares of the company, and its old owner holds around 2% shares.

Emran Hossain said, "When the new management took charge of the company, it was already buried under a pile of debts including listing fees, rents, and other expenditures."

He said "The previous management did not focus properly on the IT business. Now, the new management has decided to focus on IT business properly as there are huge opportunities."

According to Dhaka Stock Exchange (DSE) data, the company made a profit of Tk46 lakh in FY20.

But in FY21, the company turned a loss of Tk8.61 crore, whereas other firms in the IT sector were prospering. 

Owing to a huge loss, the company did not declare any dividend for FY21. 

And, even after seven months of the last fiscal year end, the company failed to publish its FY22 financials.