State Trading Organisation (STO) has commenced operations of the Maldives Industrial Fisheries Company (MIFCO) as its subsidiary with Allied Insurance holding 0.01 percent of its shares.
The Maldives government had decided to take over the state fisheries firm earlier this month, disclosing that the mismanaged company had amassed a staggering MVR 300 million debt.
In a notice released Thursday, STO announced its Board of Directors’ official decision to convert MIFCO into its subsidiary with STO holding 99.99 percent of its shares and its other subsidiary Allied Insurance holding 0.01 percent. The development was registered at the economic ministry last Tuesday.
STO stated that as MIFCO is a separate state entity responsible for its debt, STO had balanced MIFCO’s negative net assets before converting it into a subsidiary. The main trading company will also seek an independent international audit firm to conduct a financial due diligence on MIFCO and to investigate its assets’ value and financial condition.
STO also declared that MIFCO will be a bolstering factor to the main company via more oil trade expansion and influx of foreign currency, vowing a turnaround of fortunes for the new subsidiary.
STO currently operates a number of subsidiary companies including Allied Insurance, Fuel Supplies and Maldives Gas.