Options to bail out Biman from liabilities under study
Sunday, 12 August 2007
S M Jahangir
The authorities are considering various options to settle the liability of the national airlines outstanding with the Bangladesh Petroleum Corporation (BPC).
Biman, which was converted into a public limited company (PLC), owes nearly Tk 17 billion to the state-run petroleum marketing entity on account of fuel purchase on deferred payment, official sources said.
"At least three options regarding the settlement of the Biman's outstanding dues with the BPC are under consideration of the government," a senior government official said.
Among the options, a proposal for adjusting such liability through issuing the shares of the newly converted public limited entity in favour of the BPC is under scrutiny, he noted.
Besides, the government is also considering bailing out Biman by issuing bonds, the official said.
Apart from the aforesaid options, the authorities are also considering to leave such liability in the Biman's balance sheet until the new company becomes a profitable entity, he added.
The government recently converted the BBC into a PLC -- Biman Bangladesh Airlines Limited (BBAL) -- to make the national airlines operationally sound and commercially viable without settling its huge liabilities.
The national carrier could not settle the outstanding dues because it continued to suffer significant amount of operating losses every year.
Official figures suggested that it had incurred a loss to the tune of Tk 12 billion in fiscal year 2006-07 alone.
The non-payment of dues by Biman had created financial crisis in the state-owned BPC, especially for smoothly running its marketing operations, official sources said
In this backdrop, the Energy Division had earlier sought a lump-sum Tk 15 billion from the government to help the already loss-making BPC foot its fuel-oil import bills, sources said.
They further said the BPC has been incurring huge losses every year mainly for supplying fuel in the local market at a price lower than its import cost.
Taking the BPC's prevailing fund crisis into consideration, the Energy Division also suggested that the government should continue paying Tk 2.0 billion per month.
"We have sought such funding support from the government so that the BPC are able to maintain its import and marketing of fuel oil accordingly," said the Energy Division official.
Sources, however, said apart from its huge liability with local banking systems, the BPC has also owed a significant amount of money to Islamic Development Bank (IDB).
The authorities are considering various options to settle the liability of the national airlines outstanding with the Bangladesh Petroleum Corporation (BPC).
Biman, which was converted into a public limited company (PLC), owes nearly Tk 17 billion to the state-run petroleum marketing entity on account of fuel purchase on deferred payment, official sources said.
"At least three options regarding the settlement of the Biman's outstanding dues with the BPC are under consideration of the government," a senior government official said.
Among the options, a proposal for adjusting such liability through issuing the shares of the newly converted public limited entity in favour of the BPC is under scrutiny, he noted.
Besides, the government is also considering bailing out Biman by issuing bonds, the official said.
Apart from the aforesaid options, the authorities are also considering to leave such liability in the Biman's balance sheet until the new company becomes a profitable entity, he added.
The government recently converted the BBC into a PLC -- Biman Bangladesh Airlines Limited (BBAL) -- to make the national airlines operationally sound and commercially viable without settling its huge liabilities.
The national carrier could not settle the outstanding dues because it continued to suffer significant amount of operating losses every year.
Official figures suggested that it had incurred a loss to the tune of Tk 12 billion in fiscal year 2006-07 alone.
The non-payment of dues by Biman had created financial crisis in the state-owned BPC, especially for smoothly running its marketing operations, official sources said
In this backdrop, the Energy Division had earlier sought a lump-sum Tk 15 billion from the government to help the already loss-making BPC foot its fuel-oil import bills, sources said.
They further said the BPC has been incurring huge losses every year mainly for supplying fuel in the local market at a price lower than its import cost.
Taking the BPC's prevailing fund crisis into consideration, the Energy Division also suggested that the government should continue paying Tk 2.0 billion per month.
"We have sought such funding support from the government so that the BPC are able to maintain its import and marketing of fuel oil accordingly," said the Energy Division official.
Sources, however, said apart from its huge liability with local banking systems, the BPC has also owed a significant amount of money to Islamic Development Bank (IDB).