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Indian government is putting high-level pressure on Sri Lanka to pay over US$ 50 million owed to a subsidiary of the Indian Oil Corporation. Indian High commission in Colombo is putting diplomatic pressure for the settlement of over-dues to down stream petroleum marketing firm Lanka IOC.
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The company’s management here says its parent IOC is simultaneously pushing the local management to also collect the dues.
Lanka IOC, already geared with a 100 percent gearing is finding it hard to raise more money to finance its operations here.
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“The government owes us 50 million whereas our capital itself is only 15.2 million,” notes M. Nageswaran, MD, Lanka IOC.
“We have stretched our borrowing to the maximum and our operations are almost financially choking.
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We have highlighted it to the government and through the High Commission as well. We hope to receive a fair amount of subsidy shortly.
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The company’s currents borrowings are at around US$ 55 million.
While US$ 35 million is from Citiba