Beximco Sukuk Faces Default Risk As Land Mortgage Standoff Grows

Beximco’s trustee has moved to force a mortgage on 100 acres of solar-farm land after the conglomerate refused to sign the deed protecting holders of its Tk3,000 crore Green Sukuk, according to The Business Standard. The standoff comes as the five-year instrument’s December 2026 maturity approaches, with roughly Tk2,800 crore owed to investors, the paper reported.

Beximco’s Tk3,000 crore Green Sukuk faces repayment risk before its December 2026 maturity because the underlying land was never transferred to the trust, only solar-panel equipment was, according to The Financial Express. Trustee ICB is seeking a mortgage on 100 acres of solar-park land, but Beximco has refused to sign it, per The Business Standard.

The Mortgage Standoff

The Investment Corporation of Bangladesh, trustee for the sukuk, has verified ownership documents for the Teesta Solar and Korotoa Solar projects and paid land taxes on 125 acres of the 650 acres tied to the two plants, The Business Standard reported. ICB identified 100 acres it considers suitable for mortgaging in favor of the Beximco Green Sukuk Trust and sent Beximco the mortgage deed, but the company has declined to execute it, citing legal and governance constraints, according to the paper. New Age BD independently reported on July 22, 2026, that the underlying assets were not properly transferred to the trustee and that the sukuk faces repayment risk as maturity nears.

Asset-Backed in Name, Not in Law

Although marketed as asset-backed, the underlying project land was never officially transferred to the trustee; only the solar-panel equipment was transferred against the bond, a structure that violated Bangladesh Securities and Exchange Commission regulations, per The Financial Express. Banks subscribed about 70% of the Tk30 billion issuance, with mutual funds and corporate investors taking the rest, after Bangladesh Bank issued a circular allowing banks to invest without counting the exposure against their capital-market limits, the paper said. The bond also carried a right to convert 20% of holdings into Beximco shares annually at a 25% discount, per The Financial Express, though investors have largely avoided converting, according to The Business Standard’s earlier reporting.

The Extension on the Table

A high-powered committee led by Bangladesh Bank has recommended extending the sukuk’s tenure by six years, to 2032, instead of the scheduled December 2026 maturity, in order to avert default and protect institutional holders, The Business Standard reported. ICB has flagged several risks to the final redemption, including Beximco Group’s financial distress, prolonged shutdowns at its textile units, weak cash flow, incomplete implementation of the Korotoa Solar project, and limited access to alternative financing, the paper said. About 94% of the five-year instrument remains unpaid as the maturity date closes in, according to the same report. Beximco Group’s finances have worsened, too: profit fell 77% year-on-year to Tk7.1 billion in fiscal 2023, operating cash flow turned negative, and debt-to-equity stood at Tk1.21 borrowed per Tk1 of equity as of March 2024, per The Financial Express. The Financial Express also reported that Salman F. Rahman, Beximco Group’s vice-chairman and a former industry adviser to ex-Prime Minister Sheikh Hasina, was arrested on August 13, 2024.

What It Means for Sukuk Structuring

The episode revives a question that recurs across the wider market: whether an instrument marketed as asset-backed actually carries an enforceable claim on assets, or merely resembles one on paper. Reporting on Shariah audit governance in Bangladesh’s Islamic banking sector has flagged similar gaps between disclosed structures and underlying enforcement. The contrast matters beyond one issuer: as The Halal Times has reported on the shifting geography of global sukuk issuance, investors pricing asset-backed paper anywhere will be watching whether Bangladesh’s regulator can force a fix, or whether the six-year extension merely papers over it. Prior reporting from The Business Standard noted that banks were pressured to buy the Tk3,000 crore sukuk, a fact that doesn’t inspire confidence in how the next asset-backed issuance gets underwritten.

Beximco isn’t a stranger to late repayment: the company took roughly 15 years to settle about Tk1 billion in debentures issued in 1994-95, finally repaying them in 2021, according to The Financial Express. Whether the committee’s extension is adopted, or ICB’s mortgage push forces Beximco’s hand first, will be decided before the sukuk’s December 2026 maturity, per The Business Standard.

Frequently Asked Questions

What is happening with the Beximco Green Sukuk?
ICB wants a mortgage on 100 acres of solar-park land to secure the Tk3,000 crore sukuk, but Beximco has refused, with Tk2,800 crore due at the December 2026 maturity, according to The Business Standard.

Why is the Beximco sukuk at risk of default?
It was marketed as asset-backed, but the land was never transferred to the trust, only solar-panel equipment was, a structure The Financial Express reported violated BSEC rules.

Will Beximco repay its sukuk by the December 2026 deadline?
It’s uncertain. A Bangladesh Bank-led committee has proposed a six-year extension to 2032, and about 94% of the sukuk remains unpaid, according to The Business Standard.

What is the Beximco Green Sukuk?
It’s a Tk3,000 crore, five-year green sukuk funding Beximco’s Teesta and Korotoa Solar projects, with banks subscribing about 70% of the issuance, per The Financial Express.

Who is the trustee for the Beximco Green Sukuk?
ICB, the Investment Corporation of Bangladesh, is the trustee. It has paid land taxes on 125 of the 650 acres tied to the solar projects, according to The Business Standard.