The Indian Ministry of Defense-owned Garden Reach Shipbuilders & Engineers Ltd. (GRSE), a public sector company, and the Bangladesh Navy inked a significant shipbuilding contract. Building a contemporary ocean-going tug a special kind of ship designed to push or drag other ships across the ocean was the aim.
The Order Came Before Political Changes in Bangladesh
At the time this order was given, Sheikh Hasina was still in power in Bangladesh. There were still a few weeks left before she was removed from her position. So, the deal was signed while her government was still active.
The order had a high value- The order was worth approximately 180 crore Indian rupees, or 21 million US dollars. For the Indian business GRSE, this was a significant and lucrative transaction.
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GRSE’s Share Price Went Up After the Order
Right after getting this order, the stock price of Garden Reach Shipbuilders increased by almost 10%. This showed how much the investors trusted and appreciated this new business deal.
The Order Has Now Been Cancelled
Now, nearly one year after the order was received, the company has officially announced that the contract has been cancelled. This information was shared by GRSE in a filing submitted to India’s stock exchange on Wednesday, 21st May.
Share Price Was Affected Again
After the news of cancellation came out, the company’s share price fell sharply on Thursday morning. However, by the end of the day, the company managed to recover some of the loss in the stock market.
No Official Reason from Bangladesh Yet
Even though the order has been cancelled, no official explanation has been given by the Bangladesh Navy or its Ministry of Defence. It is still not clear why the deal was called off.
