Business News of Wednesday, 7 February 2018
The Cocoa Processing Company (CPC) has disclosed to Citi Business News it has re-engaged its lenders to extend the payment dates for debts owed, by at least three more years.
The CPC maintains that the decision is necessary to stay relevant in the cocoa sector and give investors value for money.
The cocoa processor is indebted to a group of syndicated banks to the tune of $20,213,037 for over a decade now.
This has also been blamed on the persistent challenges that have confronted the company for sometime now.
These border on unfavourable economic conditions; market, operational and environmental conditions, among others.
The Managing Director of the Cocoa Processing Company, Nana Agyenim Boateng who was speaking at a facts behind the figures session on Tuesday further explained the conditions under which the extension has been calculated.
“Looking at the two options available, that is what will determine the decision to take with the banks. Upon waiting and realized that the banks were not pursuing the money even at a time that the results are turning positive, there is a lot of re-financing options available. But I am only being careful and not being ungrateful that is why I am asking for an extension but if a bank insists, then I’d have to find money to repay the money as quickly as possible,” he explained.
Reacting to concerns on whether or not the company sought a reduction on the interest rate charged on the loan initially, Mr. Agyenim Boateng replied in the negative.
He argued that such decision would have compounded the banks’ challenges due to the length of the delay of the repayment.
“I didn’t get the 9.58% reduced because I have starved the banks of their due for long,” he added.
The affected banks include Barclays Bank, Ecobank and Societe Generale.
Meanwhile the company has assured that it is working to pay all outstanding debts owed the Ghana Cocoa Board (COCOBOD).
In 2005, COCOBOD was converted some 16 million dollars of its debt owed it by CPC into equity.
Subsequently in 2008, the regulator also moved some 32 million dollars of CPC’s indebtedness into long term loan at an annual interest rate of 5%.
The recent announcement by CPC follows months of caution of a possible delisting from the Ghana Stock Exchange due to the company’s inability to meet its listing obligations such as paying of listing fees, not organizing AGM’s, non-disclosure of financial statements, among others.