Fenaka Corporation Managing Director Muaz Mohamed Rasheed has disclosed that the company is experiencing significant financial difficulties, including challenges in paying employee salaries for the past two months. This shortfall stems from an MVR 86 million gap between the company’s monthly revenue and operational costs.
According to Muaz, Fenaka requires MVR 299 million each month to sustain operations but generates only MVR 213 million in revenue. The largest expense is fuel costs, amounting to MVR 98 million monthly, followed by employee salaries at MVR 79 million—constituting 35% of total revenue.
Additional financial burdens include:
- MVR 30 million in monthly loan repayments
- MVR 10.5 million for an out-of-court settlement
- MVR 17 million in administrative expenses
The financial strain has put approximately 2,000 jobs at risk. Muaz emphasized that without the necessary MVR 86 million infusion, layoffs might be inevitable unless the government or the Ministry of Finance provides financial assistance.
The situation has been exacerbated by political appointments within the company, which Transparency International reports suggest have contributed to overstaffing and financial inefficiency.
Measures to Address the Crisis
Fenaka has proposed several solutions to bridge its financial gap:
- Increased Government Subsidy: The company has requested an increase in subsidies for its sewerage services, which currently cost MVR 35 million monthly while receiving only MVR 11 million in government support.
- Loan Restructuring and Deferrals: Requests have been made to defer payments on loans, including:
- MVR 150 million from a 2014 loan
- MVR 33 million from a MVR 120 million loan
- MVR 231 million from loans acquired last year
- Debt Recovery: Fenaka seeks assistance in recovering MVR 350 million owed by government agencies.
- Loan Restructuring with Maldives Islamic Bank: The company has sought to renegotiate an MVR 400 million loan.
Despite efforts to reduce administrative costs—saving MVR 160 million in operating expenses by October 2024—these measures alone have proven insufficient.
Mounting Debt
Since the current administration took office, Fenaka’s debt has surpassed MVR 4.3 billion, compounded by unpaid bills and unrecorded work across multiple islands. Muaz highlighted the urgent need for government intervention to stabilize the corporation’s financial position.
