The amount of debts of Hotel InterContinental Dhaka to Agrani Bank Limited has ballooned to Tk 909 crore as the company failed to pay any installment in the last seven years until September 2021, which has become a heavy drag on the company's profit-making ability.
Earlier on May 10, 2015, state-run Agrani Bank provided Tk 561.4 crore to finance construction and renovation work of Hotel InterContinental Dhaka which is under the ownership of Bangladesh Service Limited (BSL).
The company's current liabilities exceeded its current assets by Tk 160.15 crore and it incurred Tk 180.65 crore in losses for the year ended June 30, 2021 against losses of Tk 46.29 crore in the previous year due to the Covid pandemic, according to the latest financial reports of BSL.
The principal and interests of the debt stood at Tk 909 crore, as per the financial statements as of September 30, 2021. The commercial loan bears interest rate at 11.5 per cent.
Leasehold land and building of the company along with renovation work/ materials are mortgaged against the loan. The company had invested around Tk 700 crore in the renovation work.
BSL managing director Md Abdul Quaiyum said that the company was trying to come out from the unfavourable situation. 'A board meeting will be held to find ways to resolve the debt issue as soon as possible,' he said.
Quaiyum also said that the company urged the bank to reduce the interest rate to 7 per cent and extend the tenure of the loan. BSL had made better revenues in the first two years of its operations, but the hotel business has faced a severe blow amid the Covid pandemic, he said.
The country's first-ever five star hotel, owned by BSL, started its journey under the name of Hotel InterContinental Dhaka back in the mid sixties, subsequently it operated as Dhaka Sheraton Hotel, and of late as Ruposhi Bangla from May 2011 to August 2014 after the expiry of the contract with Starwood, the parent company of Sheraton.
On February 19, 2012, BSL signed a management agreement with InterContinental Hotels Group (IHG) (Asia Pacific) Pte Limited for a 30-year term for management of its hotels with the option of renewing the agreement for two terms of 5 years each.
As per agreement, the hotel has been renovated as per brand standards of IHG. After the renovation, the hotel was inaugurated on September 13, 2018 and went into commercial operations on December 1, 2018. There are 226 rooms of different types in Hotel InterContinental Dhaka
