Plan to sell SOEs cheaply

The Privatisation Commission is going to propose sale of two state-owned textile mills at prices half their asset value.

Chairman Mirza Abdul Jalil on Tuesday said the proposals to sell off Magura Textiles Mills Limited and Rangamati Textile Mills Limited would be placed on Wednesday at a meeting of the Cabinet Committee on Economic Affairs.

“We hope the proposals will be approved this time,” he told bdnews24.com.

The proposed sales price of the two mills is Tk 601 million against their asset value of Tk 1.14 billion. But after the privatisation, the government will have to pay back Tk 1.74 billion in liabilities of two mills.

According to the sale proposals, Magura Textile, shut since May 2008, has assets valued at Tk 597.2 million and Rangamati Textile, closed since April 2009, has Tk 547.5 million in assets.

Kabir Enterprise quoted Tk 310 million for Magura Textile and Sattar Enterprise Tk 291 million for Rangamati Textile.

The government has to clear liabilities of Tk 1.09 billion for Magura Textile and Tk 646 million for Rangamati Textile.

Kabir Enterprise and Sattar Enterprise had quoted Tk 285 million and Tk 281 million respectively to be the highest bidders for the two mills and their proposals were placed at the cabinet committee meeting in Sept 11 last year for approval.

As the committee sent back the proposals citing low prices, the two bidders later raised the bids.

Asked why the Commission moved to sell the mills at prices much below their asset value, Jalil said: “The mills have remained abandoned. It would be useful for the country if they come into operation.”

According to the commission website, 74 mills have so far been privatised -- 54 through bidding and 20 through floating of shares.