Debt-laden Fenaka will profit, new owner STO says
President Mohamed Muizzu on Sunday decided to designate debt-laded Fenaka as a 100% subsidiary of the STO.
Fenaka Corporation, which will run as a subsidiary company of State Trading Organisation (STO), will be a profitable company, STO said Wednesday.
President Mohamed Muizzu on Sunday decided to designate debt-laded Fenaka as a 100% subsidiary of the STO.
The president made the decision after discussing the paper presented by the finance ministry at the cabinet meeting held on Sunday.
In a statement issued on Wednseday, STO said the largest expenditure of Fenaka on business is fuel and the transfer of Fenaka under STO will benefit both the companies.
The board of directors of STO on Tuesday decided to formulate a joint plan with the finance ministry to operate Fenaka as a subsidiary of STO.
Under the plan:
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Financial and legal due diligence will be conducted through an independent audit firm
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Property will be valued and financial situation will be identified
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The company will work with the finance ministry to restructure and strengthen operations
The interim board will represent STO, the finance ministry and the environment ,inistry.
With the complete transfer of Fenaka under STO, the company's board of directors will be formed in accordance with the STO's governance code and the rules for appointing members to subsidiaries.
STO said the majority of Fenaka's $4 billion debt is owed to STO Group and it will work to recover the money accordingly.
