The Maldivian government has announced it envisions demerging Maldives Industrial Fisheries Company (MIFCO) from State Trading Organization (STO) once the company becomes profitable, and demerging and running Kooddoo Fisheries and Felivaru as subsidiaries of MIFCO.
Kooddoo and Felivaru were demerged and run as separate entities during former President Mohamed Nasheed’s administration. However, the two companies were returned MIFCO’s control and run as its subsidiaries in 2014, during former President Abdulla Yameen Abdul Gayoom’s administration.
In face of mounting debt, MIFCO was merged into the State’s largest company, STO, in September, 2016.
At the Jazeera Holhuashi session held for local fishermen in G. Dh. Thinadhoo last Friday evening, a member of the general public suggested demerging MIFCO from STO, and running MIFCO, Kooddoo and Felivaru as separate business entities.
In response to the suggestion, President Ibrahim Mohamed Solih said neither of the companies were currently financially sound enough to survive on its own, but that the government envisioned demerging the companies once they are financially sound.
“At present, Kooddoo cannot survive on its own if its demerged. But we will, In Sha Allah, improve the companies and bring the structural changes once it has the capacity to survive on its own. This is our vision,” said Solih.
The President did not go into details regarding the government’s plans during last Friday’s session.
Chief of Staff of the President’s Office, Ali Zahir confirmed to ‘Sun’ this Saturday that it is the current administration’s plan to demerge Kooddoo and Felivaru.
“The government envisions running Kooddoo and Felivaru as separate entities. But it will not happen now. It will happen once MIFCO becomes profitable,” said Ali Zahir.
Last Friday’s Jazeera Holhuashi session was also attended by senior officials from STO.
Speaking at the session, STO’s Managing Director, Hussain Amr Mohamed Rashad said the company has so far incurred MVR 450 million in losses due to its merger with MIFCO.
He said the decision for the merger was made not out of want, but out of necessity due to MIFCO’s bankruptcy.
President Solih said the government will bring about major structural changes to MIFCO and make it profitable by end of this year.
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