Mobil Jamuna Lubricants (MJL) Bangladesh has decided to increase its corporate guarantee from $20 million to $40 million in favour of MJL (S) PTE so that it can take more working capital loans.
A corporate guarantee is an agreement in which one party, called the guarantor, takes on the payments or responsibilities of a debt if the debtor defaults.
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MJL (S) PTE, the offshore trading and investment arm of East Coast Group, sources, procures, supplies and transports hydrocarbons, including fuels such as liquefied petroleum gas (LPG).
Md Rokibul Kabir, company secretary, said MJL (S) PTE needs more working capital loans, so it decided to increase the amount of the corporate guarantee.
About the use of the loans, he said it would now send LPG straight to Bangladesh.
Earlier, tankers first went to India and then came to Bangladesh, which was quite costly and time consuming, he said.
MJL Bangladesh will give the guarantee to Standard Chartered Bank Singapore and Hongkong Shanghai Banking Corporation Singapore for securing repayment of credit facilities availed by MJL (S) PTE, said MJL Bangladesh in a disclosure at Dhaka Stock Exchange (DSE) yesterday.
It also decided to change its registered name from MJL Bangladesh Limited to MJL Bangladesh PLC in accordance with the Companies Act 1994 (amended in 2020).
Stocks of MJL Bangladesh remained the same at Tk 86.7 yesterday at the DSE. Its paid-up capital was Tk 316 crore, according to the DSE data.
Its total revenue advanced 11 per cent to Tk 1,047 crore in 2021-22. The company's profits rose 1.8 per cent year-on-year to Tk 218 crore, according to the company's financial reports.
