The State Trading Organisation (STO) has halted its plans to acquire Fenaka Corporation following a directive from the Ministry of Finance.

Initially, the Government had decided in August to transfer Fenaka to STO in a bid to address the utility’s financial challenges. However, on October 24, the Ministry of Finance issued an order for the suspension of the acquisition process.

STO, in a statement released on Thursday, explained that the decision came after the Board of Directors reviewed the progress made on the acquisition proposal and the government's request.

The Ministry of Finance has stated that it is now exploring alternative solutions to resolve Fenaka’s financial difficulties. One potential solution being considered is transferring the management of Fenaka to the State Electric Company (STELCO) rather than STO.

Fenaka, which has been facing significant financial pressures, particularly after the administration of former President Ibrahim Mohamed Solih, has been struggling with a growing debt and a rising workforce. In efforts to cut costs, Fenaka has already laid off more than 900 contract employees.

As the situation continues to unfold, stakeholders remain concerned about the long-term stability of Fenaka and the broader implications for the energy sector. The Ministry of Finance is expected to announce further decisions regarding the company’s future soon.