Financial assistance provided to the Maldives Industrial Fisheries Company (MIFCO) from the government and other sources over the past nine years amounts to MVR 2.5 billion, the state-owned fisheries company has said.
According to information shared with the media on Tuesday about the company’s finances, MIFCO has faced massive losses as a result of having to buy fish above the market rate. The government arranged MVR 1.5 billion as financial assistance to MIFCO since 2015.
“The total amount of grants and loans provided to MIFCO from the government budget and loans arranged by financial institutions reaches MVR 2.5 billion. Before this period, a loan of MVR 576 million previously taken from the government was written off by the government in 2022,” the information stated.
The company has the necessary energy and capability at present to carry out operations but the financial burden needs to be relieved with urgent measures, MIFCO said.
“When the company was a subsidiary of STO [State Trading Organisation], MVR 512 million worth of oil was released on credit by 2022 for STO to provide cashflow support to MIFCO. No repayments of this debt have been made to STO so far,” MIFCO said.
While the amount of loans provided through various financial institutions between 2020 and 2022 to manage MIFCO’s cashflow amounts to MVR 645 million, interest payments for the loans cost MVR 40 million a year, the company informed the media.
“Challenges faced while operating the company with debt and dependent on government assistance can only be solved by restructuring the company’s costs and bringing changes to operations and the company’s management. These efforts are underway in collaboration with the relevant agencies,” MIFCO said.
In order to pave the way for the changes, MIFCO said it has invested in increasing fish processing capacity whilst trying to secure further investments.
“Plans have been made to carry out projects worth MVR 2.5 billion to develop MIFCO over the next five years and related efforts are ongoing.”
