STO halts Fenaka merger on govt directive
Fenka owes billions of MVR to suppliers.
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State Trading Organisation (STO) has halted the process of acquiring Fenaka Corporation following instructions from the finance ministry.
The government initially decided to transfer Fenaka to STO in August. However, according to STO, the finance ministry issued an order on October 24 to stop the process.
In a statement on Thursday, STO explained:
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The finance ministry directed the suspension of the acquisition process.
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The STO Board of Directors, after reviewing the progress made in implementing the acquisition proposal submitted to the government, decided to halt the acquisition of Fenaka’s shares.
The finance ministry has indicated it is exploring alternative solutions to address Fenaka’s financial challenges. One possibility under consideration is transferring Fenaka under the management of the State Electric Company (STELCO) instead of STO.
Fenaka has been facing significant financial difficulties, attributed to increased debt and a rise in the workforce during the administration of former President Ibrahim Mohamed Solih. The company owes billions of MVR to suppliers.
To cut costs, Fenaka has been reducing its workforce. More than 900 contract employees have been laid off as part of these efforts.
