Image: By Kate Uvia
David Kavanamur, chairman of Kumul Consolidated Holdings (KCH), said the company has a good understanding of the financials and debt structure of state-owned companies (SOEs).
He said this in response to an update on SOE reforms, which included the situation of SOEs that had struggled to be profitable for the previous 20 years.
“We feel that we are getting a good handle on the current status of SOEs’ financials and debt structures with a view to restructure debt and recapitalise the business,” he said.
“We have completed our five-year SOE strategy which will go to Cabinet before release.
“As pointed out, the status of SOEs has been well known for the last 20 years and there is no surprise.
“The only surprise will come when we turn them around and we have just started on that journey.”
KCH managing director Isikeli Taureka previously stated that SOEs' total assets were about K6 billion, but only about K65 million was paid out in dividends each year and that SOE reforms were in the works to address this.
Taureka stated that the government was trying to sell non-profitable businesses.
He stated that the National Executive Council (NEC) had approved the sale of non-core state-owned companies that did not generate any money.
According to Taureka, the NEC had authorized the change, which was backed by the Asian Development Bank with a loan of K500 million over three years.
The NEC decided on SOE reform as well as debt-free financing.
“The NEC decisions allow us to go through the reform, selection process, better boards, better management selection process, returning to a sound financial footing and delivering services,” Taureka said.
Reference:
Luma, Dale. The National (7 July 2021). “Kavanamur: State entities scrutinised”.
