Shares in retail fuel giant Lanka IOC Ltd., were suspended Tuesday, as the firm grapples with working capital constraints. Shares in retail fuel giant Lanka IOC Ltd., were suspended Tuesday, as the firm grapples with working capital constraints. A Colombo Stock Exchange spokesperson told LBO the stock was suspended pending a clarification from the Indian fuel subsidiary to reports that LIOC would withdraw from the local market within three months.
However, LIOC’s Managing Director, K Ramakrishnan told LBO that bank borrowings would shore up the firm’s working capital requirements for up to three months, giving it time to negotiate with the government to pay up the US$ 71 million in unpaid subsidy payments.
Lanka IOC – a unit of Indian Oil Corp., — recently said its second quarter earnings plunged 69 percent to 175.1 million over the corresponding period 2004, on record world crude prices and government imposed subsidies.
“We are a poor corporate citizen this season….. now living off bank borrowings to meet our working capital requirements,” Ramakrishnan told LBO in an early December interview.