Ministry of Finance revealed on Thursday that the sovereign guarantee of USD 127.5 million (MVR 2 billion), which was granted to Ahmed Siyam Holdings Pvt Ltd (ASH), has been paid back in full to the Export-Import Bank of China (Exim).
The loan was issued to the parliamentary representative for Dhaalu Atoll's Meedhoo constituency Ahmed Siyam (Sun Siyam) via a sovereign guarantee provided by the previous administration, a first of its kind loan for a non-state-owned entity, for the development of Sun Siyam Iru Fushi resort in Noonu Atoll.
According to the ministry, ASH deposited the complete funds this Thursday following a payback notice by the EXIM Bank after Siyam had failed to settle USD 10 million of the loan. The payback notice warned the Maldivian state to settle the outstanding amount, as the guarantor of the debt.
In the event that the state failed or refused to pay back the debt, it would result in a sovereign default, which might devalue the Maldivian currency and affect international trade, as well as affect the country's global standing and credit ratings.
Earlier this year, Moody’s Investment Service (Moody’s), one of the world's top credit rating agencies, downgraded Maldives' long-term foreign and local currency issuer, and the foreign-currency senior unsecured ratings to 'B3' from ‘B2’, maintaining the negative outlook.
This was preceded by Fitch Ratings' downgrading of Maldives' long-term foreign and local currency issuer default ratings (IDRs) to 'B' from 'B+', revising the archipelago’s credit outlook from 'Stable' to 'Negative'.