Local Akij Group has completed acquisition of two Malaysian companies with $77 million, including $20 million taken from Bangladesh, but profit repatriation from the Southeast Asian country to Bangladesh is unlikely to start in few years.
Officials of Akij Group announced the acquisition at a press conference held at the Six Seasons Hotel in Dhaka on Sunday.
Akij Group managing director SK Bashir Uddin mentioned the acquisition of two Malaysian companies — Robin Resources Malaysia SDN BHD and its subsidiary Robina Flooring SDN BHD — as a matter of ‘pride’ for Akij Group as well as for the country.
The companies manufacture medium-density fibre board and wood floor tiles and different wood products and export to about 60 countries.
The Group has plans to double the production capacity of the entities within a very short period of time, Bashir said.
Akij Group chief financial officer Shamsuddin Ahmed said the acquisition of the two entities cost $77 million in total.
Of the cost, $20 million has been invested through Akij Group’s ERQ account (exporters retention quota account).
The Group took special permission from Bangladesh Bank for investing the ERQ account fund in Malaysia.
German Development Finance Institution DEG, a concern of Germany’s kfw, a German government-owned development bank, gave $24.5 million in loan, Standard Chartered Bank Malaysia $13.5 million, another local financial institution would finance $10 million and the rest of the cost of the acquisition would be met through dividend income.
Shamsuddin said that the profit after tax of the companies was $5 million with $16 million revenue.
Asked how much money Bangladesh would receive annually as remittance due to the investment made by Akij Group, Shamsuddin said, ‘Firstly we will have to reply instalments of the loans and that would require $5-$5.5 million a year.’
He informed that the loans were term loans of 7-9 years.
Unless any further investment is made, the Group would repatriate rest of the amount to Bangladesh, said the Akij Group CFO.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Trade & Commerce