Europe | March 17, 2014

General Electric Manufacturing facing financial crisis due to working capital shortage

Bangladesh, Chittagong: General Electric Manufacturing (GEM) is facing financial crisis whilst lacking the necessary working capital or financial support from the government. GEM is the only transformer manufacturer in the public sector.

 

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Bangladesh, Chittagong: General Electric Manufacturing (GEM) is facing financial crisis whilst lacking the necessary working capital or financial support from the government. GEM is the only transformer manufacturer in the public sector.

According to the GEM officials, Bangladesh Steel and Engineering Corporation (BSEC) is refusing to salvage the plant. The leasing deal of 30 acres of the land to the Eastern Refinery Ltd., which started in 2011, can save the plant but it has not been closed yet. The deal could bring in BDT 2 billion (approx. $ 25.7 million), according to the sources.

“The money soucred from the deal can only save GEM from the crisis. It will provide us necessary working capital, clear up bank loans, and help us to pay the dues of our retired officers and workers.“ said GEM managing director. GEM also has a bank loan of BDT 1 billion ($ 12.9 million) and the government has decided to call tenders to hand the company over to the private sector instead of trying to save it.

The plant was set up in 1978 by the Soviet Union to manufacture power transformers of different sizes for the power distribution across the country. At the moment, it produces three types of power transformers: 100 kVA, 200 kVA and 250 kVA. Apart from not having working capital, the plant’s future is threatened by other private sector competitors.

Source: The Financial Express
Image: General Electric by Kristina Frazier Henry (Creative Commons Licence)