Fenaka's Massive Debt Burden Set for Pre-Ramadan Relief

In a significant financial turnaround, Fenaka Corporation is poised to clear a substantial portion of its outstanding debt before Ramadan, according to Managing Director Mohamed Najah. The state-owned utility company, which inherited a staggering MVR 4.3 billion debt when the current administration took office, has been one of the most heavily indebted public enterprises in the Maldives.

The company has already made notable progress in debt reduction, having paid off MVR 20 million in December alone. However, Najah revealed that MVR 640 million is still owed to vendors, though arrangements have been made with the government to address this substantial liability.

"We expect to clear approximately 90% of our outstanding debts before Ramadan," Najah stated confidently. "Any remaining balance will be settled through the company's internal resources."

The utility provider has implemented aggressive cost-cutting measures, successfully reducing operational expenses by MVR 160 million compared to 2023. Despite recording an operational loss of MVR 24.7 million in the last quarter of 2023, the company maintained profitability during the first three quarters of the same year.

The government's strategic approach to rehabilitating Fenaka has focused on "right-sizing" the organization and strengthening its operational efficiency. This initiative comes in response to widespread complaints about the company's excessive debt burden and operational inefficiencies.

Najah emphasized that while current revenue streams are sufficient for day-to-day operations, addressing the substantial debt backlog required special intervention. The President's office has committed to providing necessary funding support before Ramadan, enabling the company to focus more on service delivery to island communities.

"Once we clear these financial hurdles, we can redirect our focus to expanding and improving our services," Najah explained, outlining the company's three-pronged strategy of debt settlement, operational enhancement, and service expansion.

The debt clearance initiative represents a crucial milestone in Fenaka's financial recovery, with the government's support playing a pivotal role in stabilizing one of the country's most essential utility providers. This development signals a positive turn for the company's future operations and its ability to serve the Maldivian communities more effectively.