Pubali Bank to buy Tk 8.0b project for HQ

Pubali Bank is set to acquire a five-star hotel, being constructed by Bengal Group in the capital, for Tk 8.0 billion as it plans to establish its new corporate headquarters there.

The decision was disclosed through a price-sensitive information (PSI) notice approved by the bank's board of directors and published on Thursday.

According to the disclosure, the bank has decided to purchase a 95.10-decimal plot along with the 26-storey under-construction building, including three basement floors, known as Swiss Tower.

It is located at 208 Bir Uttam Mir Shawkat Sarak (Tejgaon Link Road).

Mohammad Ali, managing director and CEO of the bank, has confirmed to The Financial Express that they have completed preliminary discussions to acquire the property.

"To finalise the deal, we need approvals from the Bangladesh Bank and other regulatory authorities, including RAJUK, to change the project's status from a hotel to a commercial building to be used as the bank's corporate headquarters," he says.

"Once we receive the necessary regulatory clearances, we will proceed with finalising the payment modality," he adds.

He says the bank disclosed the decision through a price-sensitive information notice because it involves a material corporate transaction.

According to the PSI, the acquisition valued at Tk 8.0 billion includes income tax but excludes VAT.

It remains subject to approvals from the Bangladesh Bank and other relevant regulatory authorities.

The property is being developed by Bengal Hotel and Resort Ltd, a concern of Bengal Group of Industries, for the planned five-star Swissôtel Dhaka.

Bengal Group has decided to sell the project to Pubali Bank instead of completing it as a hotel, according to people familiar with the matter.

The hotel project was first announced in 2015 when Bengal Group signed a mandate agreement with Mutual Trust Bank to raise $50 million (around Tk 4.0 billion according to the exchange rate at the time) to finance the development.

At the time, Bengal Group Vice-Chairman Jashim Uddin said the company planned to construct the hotel on its own land with an estimated investment of Tk 6.0 billion.

The hotel was designed to feature 350 guest rooms and suites, six restaurants and bars, a 950-square-metre event space that includes a 500-square-metre ballroom, and a Pürovel Spa with a swimming pool and other recreational facilities.

Initially scheduled to open in December 2018, the project was later delayed, with the revised target set for 2021.

The hotel, however, was not completed even then.

Industry insiders say Bengal Group has outstanding project liabilities of around Tk 4.5 billion to the International Finance Corporation (IFC) and Infrastructure Development Company Limited (IDCOL).

However, this information could not be verified independently.

The proposed sale comes less than three years after Bengal Group sold its liquefied petroleum gas (LPG) business to City Group for about Tk 3.5 billion.

The transaction was completed on October 19, 2023.

Bengal Group was founded by Morshed Alam, a former lawmaker of the ousted Awami League government.

Repeated attempts by The Financial Express to obtain comments from Bengal Group Vice-Chairman Jashim and Director Humayun Kabir Bablu were unsuccessful.

Both viewed the messages but did not respond.

Bengal Group Company Secretary Rajib Chakraborty told The Financial Express, "I am not aware of the matter."

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