City Group plans Tk 1,500cr capital raise amid mounting debt

City Group is turning to the capital market to raise Tk 1,500 crore as one of the country's largest business conglomerates faces more than Tk 26,600 crore in outstanding loans from banks and other lenders.
The move will mark City Group's first entry into Bangladesh's equity capital market. The group signed an agreement with LankaBangla Investments PLC at its corporate headquarters in Dhaka on Thursday to begin preparations for the fundraising.
City Group expects to complete the process within 12 to 18 months, subject to regulatory approvals, legal requirements and market conditions. The money could be raised through an IPO, private equity, preference shares, corporate bonds, sukuk or other approved capital-market instruments.
The move comes at a critical time for the group. Bangladesh Bank and lender data showed that City Group had outstanding loans of Tk 24,774 crore at the end of April 2026 from 48 banks and financial institutions. Later, 36 banks began working on a restructuring plan covering more than Tk 26,600 crore in loans.
HSBC is the biggest lender to City Group, with exposure of Tk 2,262 crore, followed by Standard Chartered Bank with Tk 2,072 crore. Among local banks, City Bank has Tk 1,679 crore in exposure, UCB Tk 1,579 crore, Eastern Bank Tk 1,407 crore, BRAC Bank Tk 1,070 crore and Prime Bank Tk 1,030 crore.
The group's other major bank lenders include Mutual Trust Bank with Tk 964 crore, Dutch-Bangla Bank Tk 946 crore, Pubali Bank Tk 913 crore, Bank Asia Tk 908 crore, Southeast Bank Tk 818 crore, ONE Bank Tk 743 crore and NCC Bank Tk 733 crore. It also owes Tk 704 crore to Dhaka Bank, Tk 696 crore to Mercantile Bank, Tk 649 crore to Islami Bank Bangladesh, Tk 622 crore to Al-Arafah Islami Bank and Tk 590 crore to Trust Bank.
City Group's borrowing also extends beyond commercial banks. IDLC Finance has exposure of Tk 494 crore, while IDCOL has Tk 268 crore, BIFFL Tk 210 crore, IPDC Finance Tk 150 crore and LankaBangla Finance Tk 119 crore.
International lenders also have exposure, including Tk 113 crore from the Asian Development Bank, Tk 101 crore from the International Finance Corporation and Tk 303 crore from the Islamic Corporation for the Development of the Private Sector.
The huge debt burden has forced lenders to take a coordinated approach to keep the group operational. Banks are working on an independent audit and a review of City Group's financial position, while proposals include extending repayment periods, monitoring cash flows through an escrow arrangement and placing bank representatives on the company's board.
City Group's financial pressure has been linked to several factors, including losses caused by the depreciation of the taka, working-capital shortages, reduced bank support and delays in gas connections for major industrial projects.
The group has invested heavily in expansion, but some projects have faced operational difficulties.
The Tk 1,500 crore capital-market plan therefore carries significance beyond simply raising fresh money. It could help City Group diversify its funding sources and reduce its dependence on bank borrowing at a time when the banking sector is already struggling with large corporate exposures.
LankaBangla Investments has been appointed as the issue manager, while ONE Bank PLC will act as the banking partner and banker to the issue. The final financing structure will depend on regulatory approval and market conditions.
City Group has been operating in Bangladesh for more than five decades and has businesses in edible oil, flour, sugar, lentils, rice, feed, consumer goods and industrial products.
The planned capital-market entry could also send a wider message to Bangladesh's corporate sector: large businesses cannot continue to rely overwhelmingly on banks for long-term financing.
For City Group, the Tk 1,500 crore fundraising is an attempt to bring investors into the funding mix while its lenders work to manage a loan exposure that has grown too large for the banking system to ignore.