Trella winds up Pakistan operations

OICCI reports its many members mulling winding up, shrinking operations

KARACHI:

Egyptian trucking startup Trella has decided to shut down operations in Pakistan, according to international media outlet, Bloomberg. The decision comes as Pakistan experiences one of its biggest economic crises, with several other companies also closing or pausing their services in the country.

The logistics company, which connects shippers to carriers, raised $42 million in financing in 2021 from investors including the venture arm of AP Moller-Maersk A/S.

In recent past, Vitol-backed VavaCars has exited Pakistan, Dubai-based Swvl Holdings paused daily rides, Uber’s Careem suspended food delivery and Airlift, which raised a record $85 million, folded.

The Overseas Investors Chamber of Commerce and Industry (OICCI) has reported that half of its surveyed members are considering winding up or shrinking operations in Pakistan due to restrictions on repatriation of profit and dividends, as well as a ban on the import of raw materials by manufacturers.

These measures have been taken by the government to manage critically low foreign exchange reserves and a high risk of default on foreign debt repayment.

Moody’s Investors Service and Fitch Ratings have both downgraded Pakistan’s credit rating to the level of ‘elevated risk of default’. Pakistan has been in talks with the International Monetary Fund (IMF) since January 2023 to resume its $6.5 billion loan programme, which has been stalled since November 2022.

State Bank of Pakistan Governor Jameel Ahmed has stated that foreign exchange reserves will surpass the $10 billion mark after the IMF programme is restarted. However, experts warn that Pakistan is showing signs of default, with massive rupee devaluation, inflation heading towards hyperinflation, and a historical high interest rate on bank financing.

Published in The Express Tribune, April 14^th, 2023.

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