Recovery of loss of "hedging" by the STC - Pillay wrote to Berenger
27 April 2011 - Défi Media Group
Extremely rare. The Chief Executive Officer (CEO) of a parastatal body wrote to the Leader of the Opposition to light his lantern.
Monday, Megh Pillay has restored the facts on the recovery of losses caused by "hedging" on petroleum products: "It has Become Necessary to throw it some light additional raised from last week in an open debate fuelled by incomplete and distorted information leading to false perceptions in the public served by the State Trading Corporation. He was emperor current CEO, my duties of care and stewardship imposes upon me the duty to set the record straight."
First, Megh Pillay confirmed that between August 2008 and June 2009, this "hedging" has caused losses amounting to Rs 4.7 billion. Thus, STC had to borrow to meet its additional debt from Morgan Stanley (Rs 4.4 billion) and Mitsui Ltd (Rs 298 million): "Unable to pass the bulk of cost that to the market in 2008/2009 STC is resorted to overdraft, lines of credit and term loans to honour commitment to its Morgan Stanley and Mitsui. In case it failed, The Was The country risk rating would plunged, dragging down-the national economy."
Rs 4.7 billion to repay loans, has spent the STC note to consumers. Initially, on each liter of fuel purchased, the consumer pays 1.50 for Re 'hedging'. In July 2009, this amount was doubled. "Faced with this debt, STC had no physical assets worth the name to sell in July 2009. Decided it was then that to recoup massive loss by way of year of the increase in the provision then hedging retail price structure of petrol and diesel. The provision rose from Rs 1.50 to Rs 3 per liter," says Megh Pillay.
Thus, STC harvest each year, about Rs 1.2 billion, including Rs 810 million to 270 million liters of diesel and Rs 390 million to 130 million liters of gasoline. As a result, consumers will ante up for these losses until May 2012.
By the way, Megh Pillay gives the lie to Mahen Gowressoo then Minister of Commerce: "Contrary to what the Minister responsible recently asserted then in the press," could not STC then, nor now, raise Rs 200 million monthly Under item That goal Rather year average of Rs 100 million."
Finally, the CEO of STC reassures the leader of the opposition that this entire amount is used to offset the loss of "hedging" on petroleum products and not one penny is used for cover other losses: "Current management confirms that the totality of amount that goes to the offset hedging loss in STC's accounts and for any other purpose not have wrongly alleged (...) STC management gives assurance that it is not and shall not be engaging in recovering losses were victims diesel and petrol to pay for any past trading of loss in other products - including major peas and milk powder - even if recorded losses latter is, however deplorable (and sensational), are relatively minor."
Ranjitsingh Soomarooa: "The 'hedging' suited the situation"
It was clear! The former CEO of STC argues that at the time the decision to opt for the "hedging" was perfectly suited to the situation and he does not regret. "Unfortunately, the price has plummeted and it was not my fault.”
“We had to maintain the payment of hedging," defends Ranjitsingh Soomarooa on the set of Grand Journal on Radio Plus on Tuesday. STC had "hedged" on 161 U.S. dollars per barrel while oil was selling for $ 142 U.S. a barrel. So, Mauritians have been forced to pay Rs 3 on each liter to repay the "hedging".
He stressed that the decision of "hedging" is not his: "I made a proposal to the board that included several experts. The "hedging" was a collective decision. The "hedging" has been repaid, but there are still debts. Ranjitsingh Soomarooa explains: "We were in financial difficulty and tried to negotiate with Morgan Stanley offered me a solution to the detriment of STC.”
“So I refused. Upon my return home, the STC had contracted loans with different banks to pay the 'hedging'. It is precisely these loans that we have to be repaid." Compared to the State Trading Company Mauritius (STCM) Ltd Ranjitsingh Soomarooa argues that it is a private company up in order to make money to provide financial support to STC. According to him, the STCM is not beholden to the government and should only submit its annual report to STC.