The State Trading Organisation (STO) has announced the suspension of its planned acquisition of Fenaka Corporation following instructions from the Ministry of Finance. The decision to halt the process, originally initiated in August, was confirmed by STO in a statement issued on Thursday.
According to STO, the directive to discontinue the acquisition process was received from the finance ministry on 24 October. In response, the STO Board of Directors reviewed the progress made in implementing the acquisition proposal and decided to cease further actions regarding Fenaka’s shares.
The Ministry of Finance has indicated it is exploring alternative solutions to address Fenaka’s financial difficulties. One option under consideration is transferring Fenaka’s management to the State Electric Company (STELCO) instead of making it a subsidiary of STO.
Fenaka, which has been grappling with severe financial challenges, owes billions of MVR to suppliers. These issues have been attributed to increased debt and a larger workforce during the administration of former President Ibrahim Mohamed Solih. In efforts to reduce costs, the company has been downsizing, laying off more than 900 contract employees.
STO has informed its shareholders of the decision and awaits further updates from the government on the next steps for Fenaka. The suspension of the merger highlights the ongoing efforts to find a sustainable solution for the state utility provider’s financial struggles.
