More than a dozen of banks yesterday sat with debt-ridden Mostafa Group, which is burdened with around Tk 1,400 crore in default loans, to find a way that would benefit both the lenders and the Chittagong-based conglomerate.
The meeting discussed various issues such as down payments and loan rescheduling, security pooling, interest waiver and working capital financing, bankers said.
Several top bankers said they demanded 5 percent of the loans as down payments from Mostafa Group for rescheduling its loans; otherwise they cannot place the issue in their respective boards.
Mostafa Group asked for extending its loan tenure to 10 years, but the bankers said the tenure cannot be more than eight years. The group also sought a full interest waiver against the loans.
The talks that failed to reach a 'concrete conclusion' were brokered by a former banker at a city hotel.
Managing directors or representatives of Pubali, Agrani, Sonali, Uttara, Dhaka, Premier, Islami, National, Eastern, IFIC, Prime, Shahjalal, Mutual Trust and Alfalah attended the meeting, where Hefazatur Rahman, chairman of Mostafa Group of Industries, was present.
“We have asked Mostafa Group to come up with its proposals to respective banks so that the banks can place the issues in their board meetings,” said the managing director of a bank, to which the company owes more than Tk 100 crore.
The Chittagong-based business group owes the highest amount -- Tk 300 crore -- to National Bank Ltd, while Prime Bank's exposure is Tk 57 crore, Mutual Trust Bank's Tk 37 crore and City Bank's Tk 17 crore.
Bankers said it must be a 'win-win outcome' for both the parties, otherwise the banks will be in trouble and their profits will be affected in meeting the loan-loss provision.
Mostafa Group, a 62-year-old company, came under the spotlight last year after banks found it difficult to recover loans from the conglomerate, which owes the amount to more than a dozen of banks. All these loans have been defaulted.

Some of the banks alleged that Mostafa Group bought huge lands by diverting funds from bank loans.
The late Mostafizur Rahman of Chittagong founded Mostafa Group in 1952. Initially it was engaged in commercial trading and export and import. Later, it started manufacturing steel products, iron and MS rod and got involved in shipbreaking, artificial leather making, and shrimp cultivation, processing and export.
The group also has business in textile and readymade garments, paper, refined palm and soybean oil, coconut oil, iodised salt, tea, rubber plantation, transport, IT and the financial sector.

Standard Chartered Bank has raised $190 million from international lenders for a 335-megawatt electricity plant of Summit Meghnaghat Power Company Ltd.
The lenders, which include international development partners and banks, have already disbursed the long-term project financing for the dual fuel-fired power plant in Narayanganj, the largest one in the private sector.
Summit has taken the loan to complete an existing project under which a single cycle power plant has been supplying about 217MW to the national grid since May.
"The unique feature of the project is that international lenders have come forward for a local project for long term," Muhammed Aziz Khan, chairman of Summit Group, which owns the plant, told The Daily Star yesterday.
He said Standard Chartered has played an extraordinary role in the project. "It has brought in a lot of confidence for the project as well as Bangladesh. We haven't seen before such a high number of foreign investors coming to Bangladesh for a single power project."
The total cost of the project is estimated at $318 million, of which the $190 million will be long-term debt.
Khan thanked Standard Chartered for not only acting as the hedge bank, account bank, inter-creditor and security agent for the financing, but also for providing $40 million on its own, the largest among the international investors.
The investors include DEG of Germany, FMO of the Netherlands, Opec Fund for Industrial Development of Austria, CDC Group of the UK, OeEB (Development Bank of Austria), Belgian Investment Company for Deve-loping Countries, and Infra-structure Development Company Ltd of Bangladesh.  
Khan said, this was the first time a Bangladeshi company accessed international loans of this magnitude for project financing.

Summit's equity investment of $117.6 million also makes it the single largest investor in a project by a local company.
The project is a landmark for Summit, given that the company completed the simple cycle part with local finance as international financiers did not feel confident initially about the project.
A good part of the $190 million will be used to repay the loans borrowed from the local banks.
Ayesha Aziz Khan, a director of the group, said her company was convinced of the economic viability of the project. "So, we started the project with the help of local lenders and our own money before we got the long-term financing."
She said the combined cycle power plant is likely to go into operation in December.  
The loan tenure is 12 years, with 18 months' grace period and less than 5 percent interest.  Ayesha said foreign investors have already started to see Bangladesh as a place for long-term investment. "This is the beginning."
Operating power plants since 1998, Summit last year built three rental power plants ahead of schedule. It now contributes 850MW electricity to the national grid from a dozen of plants. Standard Chartered has been a long partner of the group in its power sector projects, Ayesha said.
"The local lenders helped us for faster construction of the project. Now the long-term lenders are helping us make the project sustainable."