The state-owned Bangladesh Shipping Corporation (BSC) has announced plans to sell its two fire-damaged vessels, leading to a huge sell-off in its stock and a sharp decline in share prices on Wednesday.
The affected vessels, MT Banglar Jyoti and MT Banglar Shourabh, were responsible for transporting crude oil from offshore mother vessels to the Eastern Refinery. Together, they generated around 20 per cent of the company's revenue.
However, both vessels are over 30 years old, incurring high maintenance costs. In addition, BSC has already secured an alternative arrangement for crude oil transportation via pipeline from onshore vessels to the refinery.
BSC Managing Director Commodore Mahmudul Malek downplayed concerns regarding the revenue impact of the sale. "We have already been outsourcing these services and have maintained the same level of revenue. Therefore, there will be no financial impact from the sale of these vessels," he said.
There is no point of repairing these two ships because they were very old and maintenance cost was very high, he added.
The fire incidents, which took place within days of each other in late September and early October 2024, led to the decision by the BSC Board of Directors to dispose of the damaged ships.
On September 30, Banglar Jyoti was struck by a blaze, and Banglar Sourabh suffered a similar fate on October 5.
According to company filing on Wednesday, the BSC Board of Directors, in its 323rd (special) meeting, made the decision to sell the damaged vessels.
Following the announcement, BSC's stock price fell by 2.79 per cent, compared to the previous day. The share price closed at Tk 87 each on Wednesday.
According to the company's FY23 financial statement, it used to earn about 20 per cent of its revenue by providing services using these ships. The vessels were assigned the task of carrying crude oil only.
"We anticipate insignificant impacts. We have rented a foreign oil tanker to provide the same services," said Mr Malek.
Though the loss of the ships would not translate into major revenue loss, Mr Malek said the ships had been used for training of new crew members and that the oil tankers were assets of the company.
The crude oil transportation services will not be required in a few months as Bangladesh's maiden single-point mooring (SPM) system will begin operations shortly. The facility will directly transfer petroleum from offshore vessels to onshore storage tanks, reducing time and cost of oil import.
Meanwhile, for the FY24, the Shipping Corporation reported a net profit of Tk 2.50 billion, 1.38 per cent higher than in the corresponding period last year.
In the first quarter of FY25, their unaudited net profit jumped by 80 per cent to Tk 900 million from earlier period.
But the real impact of the fire incident is yet unknown as the impact will come in second quarter of FY25.
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