Civil Court Orders Fenaka to Withhold MVR 6.7 Million Over Unpaid Dues
The Civil Court has ordered Fenaka Corporation to set aside MVR 6.7 million in its accounts to settle outstanding debts owed to a third party. This decision stems from two separate court rulings—one ordering the payment of MVR 5.2 million and the other for MVR 1.5 million—based on judgments issued last year.
Although Fenaka agreed to pay these amounts in court, the corporation has yet to fulfill its obligations. Importantly, Fenaka did not file any appeals against the court's decisions in both cases.
Fenaka's Debt Crisis
Fenaka Corporation is facing mounting financial challenges. The state-owned utility provider is heavily in debt, particularly to the State Trading Organization (STO), from which it has been purchasing fuel. Currently, Fenaka owes STO a staggering MVR 2 billion.
Despite these overwhelming debts, Fenaka has made some payments, disbursing MVR 800 million to STO and other creditors. However, the corporation’s total outstanding debt still stands at MVR 4.1 billion.
Plans to Transfer Fenaka to STO
In a bid to address its financial woes, Fenaka is set to be transferred to STO, where it will become one of its subsidiaries starting January next year. This move is aimed at stabilizing the corporation’s finances and improving its operational efficiency.
STO CEO Shimad Ibrahim has expressed hope that this transfer could be a turning point for Fenaka. He believes that under STO’s management, Fenaka has the potential to become a profitable entity in the future.
What Lies Ahead for Fenaka?
As Fenaka transitions to becoming a subsidiary of STO, much remains uncertain about the corporation's future. However, with STO’s experience in managing large-scale operations, there is optimism that Fenaka can overcome its financial challenges and restructure its business.
The transfer could also help Fenaka better manage its debt and improve its fuel purchasing process, which has been one of the primary contributors to its financial troubles.
While the court orders and financial struggles present significant challenges, the upcoming transfer could mark the beginning of a new chapter for Fenaka, with the potential for more stability and growth.