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| NOT THAT SOLID: Venezuelan state firms like Sidor (photo), CVG abnd EDC are increasingly losing money and having money problems, experts warn. (Photo: Sidor) |
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Venezuelan state firms CVG, EDC and Sidor are following the lead from PDVSA with growing money problems.
BY CHRONICLE STAFF
PAYMENT PROBLEMS
Venezuela’s state-owned oil giant PDVSA isn’t the only state firm facing serious liquidity problems. The list also includes electricity company EDC (nationalized in 2007), conglomerate CVG and steel producer Sidor, UK-based risk consultancy Exclusive Analysis points out. “State-owned enterprises face serious cash flow problems resulting from major inefficiencies, high labor overheads and political interference,” Exclusive Analysis says in a recent commentary. “CVG comprises more than a dozen subsidiaries [which] are mostly bankrupt, saddled with large debts to suppliers and employees and only able to continue operating with government subsidies.”
A CVG rescue will require about $5.5 billion, the UK consultancy estimates. Meanwhile, the once-profitable EDC lost $140 million last year and is now blamed for common power outages, while Sidor in the fourth quarter last year reported a loss for the first time this decade, with this year's loss forecast at $410 million, Exclusive Analysis says.
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