MIFCO Discloses Dire Financial State Amid Struggles to Pay Fishermen
Photo: MV+
The Maldives Industrial Fisheries Company (MIFCO) today disclosed details of the company’s dire financial state amid struggles to pay fishermen for their catch.
In a statement released today, it said the company owes a total of MVR 2.5 billion to the government and financial institutions, with interest on loans adding to its financial burdens every year.
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Despite these challenges, MIFCO announced it can continue its day-to-day operations. The company has been operating under substantial debt for several years and relies heavily on government support for its finances.
MIFCO highlighted the need for immediate steps to change its direction. Since 2015, the government has provided grants and loans to offset the losses incurred from buying fish from fishers at a loss. Additionally, MVR 576 million borrowed from the government prior to this period was waived in 2022.
These funds, however, were not used to invest in the company, resulting in no profit generation. Moreover, interest on some loans reaches up to MVR 56 million annually. Since 2015, the government has granted MIFCO MVR 1.3 billion every year.
During its time as a subsidiary of the State Trading Organisation (STO), MIFCO received fuel worth MVR 512 million on a credit basis, none of which has been repaid.
Furthermore, financial institutions provided MIFCO with cash flow support facilities amounting to MVR 645 million for working capital between 2020 and 2022, with annual interest on these facilities reaching MVR 40 million.
To address the challenges of relying on government support, MIFCO acknowledges the need to restructure expenses and make operational changes. The company is working with relevant authorities to implement these changes.
In addition, MIFCO is focusing on upgrading its infrastructure and improving processing capacity. Plans are underway for a MVR 2.5 billion project aimed at further developing the company.
