8 Nov 2004

Marshall Islands government decides what to do next over failed company

4:31 pm on 8 November 2004

The Marshall Islands government could look at taking control of one of the private sector's largest companies following its default on loans.

The PMOP fish processing plant closed in August with the loss of 600 jobs after the company said it had lost close to a million U.S. dollars this year.

It has appealed to the government for funding to pay half the salary costs for a year so the plant could get back on its feet.

But, PMOP has since defaulted on it's government-backed loan and is facing criminal charges in connection to polluting from the plant.

Our correspondent, Giff Johnson, says negotiations are at a standstill and while the equipment was leased, other assets were not.

"The building is owned by the government as it guaranteed the loans so with the loan in default, the building now returns to the control of the fisheries department. So, unless PMOP resolves the default situation, it possibly allows the government to go in and take control."

Mr Johnson says the Fisheries department has proposed a joint venture with PMOP which is being resisted by the company due to the government wanting management control.