The government has decided to offload, at least, 49 per cent stakes of each of the 26 state-owned jute mills in the capital market soon, a top official of the Ministry of Textiles & Jute said.
Finance Minister AMA Muhith has already approved the move of offloading the shares of the state-owned jute mills.
Sources at the Ministry of Textiles & Jute (MoT&J) said the ministry in a meeting held on May 8, 2014 decided to turn Bangladesh Jute Mills Corporation (BJMC) into a holding company and then offloading at least 49 per cent of the stakes of the mills in the capital market.    .
It was also decided in the meeting that divestment must be completed within the next one year, the ministry official informed.
Currently the mills are running under Bangladesh Jute Mills Corporation (BJMC).
"The offloading process is under way. The government would divest the shares within a year," a top official of Ministry of Textiles & Jute (MoT&J) told the FE preferring anonymity.
The official also said the ministry has been working hard to see the state-run jute mills running profitably.
He said the government decided to turn the BJMC into a 'holding company' to protect the state-owned jute mills from incurring financial losses.
"The shares will be floated once the organisation (BJMC) turns into a holding company," he added.
As part of the offloading activities, we will immediately enlist chartered accountant (CA) firms to make the valuation of assets and liabilities of the mills under BJMC," the ministry official informed.
However, chairman of BJMC expressing his reactions over the success of the initiative said the move will surely make the mills operationally sound and economically viable.
"Floatation of shares of the BJMC-run jute mills in the share market will be a big venture for the government. Once it is implemented, we strongly believe that the mills would be able regain its lost glory" BJMC chairman, Major General (rtd) Humayun Khaled told the FE Monday.
Replying to a question, the BJMC chairman said the government has succeeded to bring down losses of the mills to a tolerable level and are trying to make other mills running profitably.
 "We have so far have succeeded to make five jute mills profitable and are hopeful to see others have become profitable after floating shares," he added.
The BJMC chairman, however, also said the move would ensure earning of lively hood of eighty two thousand workers and employee of the corporation and their hundreds of thousands dependants.
"Although the initiative to float shares of state-owned jute mills is good, its implementation needs a strong political will on the part of the government," a private sector jute mills operator told the FE.
He said if the shares of the state-run jute mills are floated, it will help bring transparency and accountability to the operations of the BJMC units, thus providing the much-needed boost to the country's overall jute sector.
According to the data of BJMC a good number of loss-making mills have already been shut down over the years.
Sources, however, said like the private sector mills, the state-run units are now running better than before thanks to a set of proactive measures taken by the government.
"Some jute mills under the BJMC are now making profits following the government's pragmatic steps that have helped the state-owned enterprises get out of recurrent financial losses in the past few years," the BJMC chairman said.
Five mills are now running profitably. According to the statistics of the government, the mills under BJMC have counted losses worth around Tk 50 billion since nationalisation up to 30th June, 2012.
The government nationalised 79 jute mills after liberation through Bangladesh Industrial Enterprises (Nationalisation) Order, 1972 (P.O.27). Later the government sold out 52 jute mills to the private entrepreneurs.
49 per cent stakes of 26 govt jute mills to be offloaded
Badrul Ahsan | Published: May 28, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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