Saif Powertec Limited is going to acquire a marine supply chain solutions provider company which was set up this year in the United Arab Emirates (UAE) by Saif Power Group and Dubai-based investors.
To provide cost-effective shipping and logistic solutions to its clients from abroad, Saif Powertec's board at a meeting on 16 June decided to acquire all shares of Saif Maritime LLC for Tk1.26 crore.
After the acquisition, Saif Powertec expects revenue of Tk26 crore and profit of Tk4 crore from Saif Maritime which will be treated as a full subsidiary company of its acquirer.
Saif Powertec, a concern of Saif Power Group, whose shares were traded at Tk34.60 each on the Dhaka Stock Exchange on 16 June, 9.15% higher than the previous session.
Currently, Saif Powertec is engaged in various types of business such as port terminal operation, installation of power plants, and producing and selling batteries and plastic goods.
A senior officer of the company, seeking anonymity, said, "Saif Powertec wants to engage in global marine supply chain solutions service. But, it is not possible to enter the global chain from the country. So a company has been set up in Dubai. From there it is easy to provide logistical services to the goods transport system."
"Saif Maritime will provide all kinds of logistics services for transporting goods by land and sea from the UAE. It is expected that the company will start operations this year," he added.
Earlier, in March this year, Saif Powertec signed an agreement with UAE-based Safeen Feeder Limited to operate the business in the shipping and logistics sector abroad.
The company will operate eight vessels to transport imported goods from Fujairah Port of the UAE to Chattogram and Mongla ports, and other ports in South-East Asia and the Indian subcontinent.
The company has also decided to build a new inland container depot (ICD) with an estimated expense of Tk300 crore. It is also going to start a gas and oil exploration business by investing Tk473 crore as the first local private company in this field.
Saif Powertec earned Tk233 crore from the port operation and Tk64 crore from selling batteries at the end of the first nine months of fiscal 2021-22. During the period, its consolidated profit was Tk42 crore.
However, its debt burden increased alarmingly. In the last five years, its borrowing from banks and non-banking financial institutions increased by 745% to Tk947 crore.
A senior analyst of a leading brokerage firm said that the business ventures that the company has undertaken have potential. But now they are in high debt. The company does not seem financially strong enough to repay loan instalments that are approaching. "So if the new business is not done successfully, the company will be under financial pressure," he added.