FNPF suffers with $10 million in ATH losses

Two subsidiary companies of Amalgamated Telecom Holdings have recorded significant losses in the last financial year ended 31st March 2010.

ATH CEO Tomasi Vakatora revealed that Telecom Fiji Limited made a $6.7 million loss while Connect incurred a $2.7 million loss last year.

Our Fiji National Provident Fund owns nearly sixty percent of the shares in Amalgamated Telecom Holdings, so these losses will be born by all contributors.

Increased competition in telecommunications would be a good thing if it had been introduced when the economy was doing well and other shares held by FNPF were earning good profits, but the opposite is true. All shares are making losses and the previously safe shares in ATH are now also losing.

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FSC and FNPF

The Fiji National Provident Fund holds nearly 8 million shares in the Fiji Sugar Corporation. After the release of the FSC financial report for the year ending 31 May 2010 we now know that all shares in FSC are completely worthless.

FSC has negative equity of $64 million. In other words, if by some future miracle the FSC can make a profit of $64 million and distribute NONE of it as dividends, its shares will still be worthless.

Or look at it another way: if the Government injected $64 million in new capital, the new shares, along with the existing shares, would be worthless from the moment they were issued.

No company that wasn’t owned by a Government would have been allowed to get into this position. The warning bells would have sounded a long time ago. But the fact is the overwhelming majority of FSC’s shares are held by the Government and the FNPF. And small shareholders are either too depressed or too afraid to demand answers of FSC management.

The FNPF holds nearly 8 million shares – all of which are now completely worthless.

Fijian Holdings Limited, the next biggest shareholder has lost all of the value of its nearly 4 million shares.

What we the FNPF contributors need to ask now is what is our exposure through loans to FSC?

FSC has $62 million in short-term borrowings and $118 in long -term borrowings. What we need to know is how much of this is owed to the FNPF? How much more is the FNPF going to lose?