Banks have decided to appoint an independent auditor to assess City Group’s financial and business condition before proceeding with any restructuring of the conglomerate’s outstanding loans, which exceed Tk26,600 crore.

The decision was taken at a meeting of senior bankers from more than a dozen banks held at Hotel Sonargaon in Dhaka on Thursday. The meeting discussed ways to keep the diversified business group operational and explore a joint restructuring of its debts.

A review committee comprising representatives from leading banks has also been formed to evaluate the group’s overall situation and recommend a way forward.

According to a managing director who attended the meeting, City Group presented its future business plans, including proposals to sell some non-core businesses to sustain operations. Although no final decision was made on loan restructuring, participating banks expressed a positive attitude toward supporting the company.

Based on the review committee’s findings, the banks will prepare a specific restructuring proposal and seek support from Bangladesh Bank.

Bankers at the meeting agreed that City Group is facing a genuine business crisis but has not engaged in siphoning money abroad, making a strong case for assisting the company in its recovery efforts.

The group’s loans have not yet been classified, and lenders are awaiting the committee’s recommendations before making any final decisions.

Established more than five decades ago, City Group generates annual revenue of around Tk32,000 crore and employs approximately 25,000 people.

To ensure greater transparency in cash flows, expenditures and sales, banks are considering placing representatives on City Group’s board of directors. If all 36 lending banks agree, they may nominate two or three representatives to sit on the board.

The proposed restructuring framework is being designed in line with global debt restructuring practices and a “waterfall mechanism.”

Mashrur Arefin, managing director and CEO of City Bank and chairman of the Association of Bankers, Bangladesh (ABB), said all participating banks conducted a detailed analysis of the situation and formed a committee comprising 12 to 13 senior bankers, including deputy and additional managing directors.

The committee will assess City Group’s financing needs, determine the level of support required from individual banks and conduct due diligence for any bridge financing needed for working capital. It is expected to report back within 10 days, after which the banks plan to approach Bangladesh Bank.

Arefin also said the ABB would request the central bank to temporarily suspend the requirement to classify City Group’s loan accounts as of June 30 and seek a one-off regulatory dispensation to facilitate the restructuring process.