RACL to be merged with MACL; FDC with HDC

The cabinet will discuss the merger of six state-owned enterprises during a meeting on Sunday, according to President Dr. Mohamed Muizzu.

In a video message ahead of Sunday’s meeting, President Muizzu said the cabinet will discuss three key decisions as part of efforts to reform SOEs. They are:

• Discussions regarding making the Regional Airports Company Limited (RACL) a subsidiary of the Maldives Airports Company Limited (MACL)
• Discussions regarding making merging the Fahi Dhiriulhun Corporation (FDC) with the Housing Development Corporation (HDC)
• Discussions regarding merging the Maldives Fund Management Corporation and the Business Center Corporation (BCC)

ވަޒީރުންގެ މަޖިލީހުގެ ބައްދަލުވުން ކުޑައިރުކޮޅެއްގެ ތެރޭގައި ފެށޭނެ pic.twitter.com/Ptjf8Xkcka

— The President's Office (@presidencymv) September 1, 2024

Last week, the cabinet decided to make Fenaka Corporation, a state utility company which has racked up debt, a subsidiary of the State Trading Organization (STO).

President Muizzu said that the cabinet will also discuss introducing an investor residency program as part of efforts to diversify the economy.

Making SOEs that a running at a loss as subsidiaries of larger SOEs is a component of the austerity measures announced by the Maldivian administration to improve the state’s cashflow.

The government has announced a string of measures to cut costs and boost revenue. This includes legal revisions to reform Aasandha, introduce targeted subsidies, and have companies that earn US dollar revenues pay taxes in US dollars.

With the country’s rising external debt servicing obligations, Fitch has downgraded Maldives’ credit rating from ‘CCC+’ to ‘CC’, warning of an increased risk of default.