Gachihata Aquaculture struggling despite owning 109 acres of land

Gachihata Aquaculture Farms Ltd – an agro-based firm delisted from the stock exchanges – has been struggling to stay afloat for the last two decades owing to a working capital shortage despite owning a large land area of 109 acres.  

In a move to protect the interest of the investors, the Bangladesh Securities and Exchange Commission (BSEC) on Monday asked for documents from the company on its current business status, land, and financials.

The commission acted on findings gathered by the Dhaka Stock Exchange (DSE) during a recent inspection of the company.

The company, which got listed on the capital market in 1998, was sent to the over-the-counter (OTC) market from the main trading board of the stock exchange for failing to run operational activities and issue dividends since 2002.

Major (retd) Md Akhtaruzzaman, a former BNP lawmaker, is the chairman and managing director of the company which is in the process of being shifted to the SME platform of stock exchanges.

Currently, Gachihata Aquaculture Farms is in operation and it has inventories of cattle, fish, and trees in its factory premises.   

It owns 109 acres of land including 85.25 acres of pond areas. The current market value of the land is approximately Tk556 crore, according to the DSE.

According to the financial report for the fiscal 2020-21, the revenue of the company stood at Tk1.58 crore, which was Tk0.40 crore in FY20.

In FY21, it received Tk140.59 crore as the other income – accumulated interest waiver from the Agrani Bank.

As a result, the total comprehensive income for the year stood at Tk139.24 crore compared to a net loss of Tk17.55 crore in the previous fiscal year.

Its earnings per share were Tk672.67 and its net asset value per share was Tk2,215 in FY21.

The company has a term loan of Tk23.71 crore with National Bank Ltd.  

Earlier, it took Tk15.24 crore from the state-run Agrani Bank to import raw materials and machinery for business expansion in 2000.

But it failed to do so for a lack of effort from the management and owners, and in consequence, failed to pay back the loan in time.

As a result, the company became a loan defaulter in 2002. Agrani Bank charged the farm Tk132 crore in interest against the principal amount until 30 June 2020.

An Agrani Bank official earlier said the lender had issued an auction notice to recover the money, but the company filed a writ petition with the High Court seeking exemption from paying the interest amount.

The HC passed an order in favour of the company, he added.

Now, National Bank acquired the loan from Agrani Bank, having assets of the company mortgaged for three years.

The company will have to pay off the loan within the time, said National Bank officials earlier.

The chairman of Gachihata Aquaculture Farms told The Business Standard, "As a publicly listed company, we want to come back to business for our shareholders".

"We are trying to comply with the regulatory requirement as per rules" he added.  

Gachihata's paid-up capital is Tk20.70 crore. Sponsors and directors hold 25.86%, institutional investors 18.12%, and general investors 56.02% shares in the company.