Banks’ BDC debts reduce by 540 million cedis
The total debt owed banks by Bulk Oil Distribution Companies (BDCs), is expected to reduce by some 540 million cedis by the end of this week.
It follows the disbursement of proceeds from the energy bond to the affected institutions.
The disbursement, Citi Business News understands was carried out on Wednesday, November 8, 2017 to Legacy Bond Limited (LBL) for onward distribution among the BDCs and their respective banks.
LBL is a company jointly established by the Chamber of Bulk Oil Distributors (CBOD) and the Ghana Association of Bankers (GAB) for purposes of repayment of the legacy debt due the two institutions.
It is unclear the total indebtedness of the BDCs to banks presently.
But information available to Citi Business News show that as at the end of December 2016, the total indebtedness attributable to BDCs stood around 1.2 billion cedis.
Industry watchers believe the figure is projected to have escalated due to foreign exchange losses plus accumulated interest among others.
Commenting on the initial payments and allocations after the energy bond, the Managing Director of CAL Bank, Frank Adu Junior stated that the disbursement to banks should reduce their exposure to the BDC debt.
“Legacy Bond Limited has been allocated 542.1 million cedis in bonds and these bonds will be shared in a certain prorated formula to the various BDCs and the bonds will be assigned by LBL to the various banks who are owed money by the BDCs in another formula that has been determined. So the BDC debts outstanding on the books of banks collectively by the end of this week, will go down by 541 million cedis,” he told Citi Business News.
Meanwhile Citi Business News understands that an additional 170 million cedis is being audited for payment to be effected by the end of November.
The move according to Mr. Frank Adu Junior, should revive operations in the energy sector soon.