Six banks set to sell PBC's assets over GH¢490 million debt

State-owned Produce Buying Company Limited (PBC), a leading cocoa value chain player, is on the verge of liquidation as its creditors begin processes to sell off the company’s assets to defray a debt of about GH¢495.4million.

The identification and attachment exercise of immovable properties of PBC has already started; after which an evaluation would be carried out to sell the assets to defray its indebtedness to the creditors.

In a landmark ruling by an Accra High Court, Judge Justice Sheila Minta awarded judgement in favour of six commercial bank creditors to PBC, namely: Agriculture Development Bank (ADB), Bank of Africa Ghana (BOA), CalBank PLC, GCB Bank PLC, Universal Merchant Bank (UMB) and United Bank for Africa (UBA) Ghana – plaintiffs one to six respectively.

The judge ordered PBC to pay each of the six banks outstanding loans plus two percent interest, in addition to legal action fees.

The judge, in the ruling, said: “I am of the opinion that there are no triable issues set forth by the defendant and therefore, no useful purpose could be served by going through all trials. I hereby enter judgment in favour of the plaintiffs against the defendant as follows:

In respect of the first plaintiff, for a sum of GH¢49,257,603.33 together with interest on the said sum at the agreed rate of two percent per annum from 1st July, 2022 till date of final payment.

In respect of the second plaintiff, a sum of GH¢11,219,641.72 together with in rest on the said sum at the agreed rate of two percent per annum from 1st July, 2022 till date of final payment.

In respect of the third plaintiff, a sum of GH¢71,749,072.73 together with interest on the said sum at the agreed rate of two percent per annum from 1st July, 2022 till date of final payment.

In respect of the fourth plaintiff, a sum of GH¢108,469,257.84 together with interest on the said sum at the agreed rate of two percent per annum from 1st July, 2022 till date of final payment.

In respect of the fifth plaintiff, a sum of GH¢42,295,384.69 together with interest on the said sum at the agreed rate of two per annum from 1st July 2022 till date of final payment.

In respect of the sixth plaintiff, a sum of GH¢13,728,627.84 together with interest on the said sum at the agreed rate of two percent per annum from 1st July, 2022 till date of final payment.

Additionally, the judge, exercising discretion, awarded a cost of GH¢600,000 in favour of the plaintiffs against the defendant as legal charges.

Following the ruling, representatives of the banks were present at the company’s headquarters in Dzorwulu on Friday, January 26, 2024 to execute the attachment of immovable properties notice from the court and alert management of subsequent actions if the debt is not paid urgently.

All parties refused to comment on the issue when the B&FT reached out to them during the exercise, but information gathered on the ground indicates that the indebtedness is largely as a result of COCOBOD’s activities and not directly as a result of mismanagement by the company.

A staff member of PBC mentioned on anonymity that unless the government steps in to handle the debt issue, the state-owned company risks sinking.

Background

On 9th October, 2023, the plaintiffs/applicants – six financial institutions engaged in the business of banking, including money lending – filed an application for summary judgment under Order 14 of C.I.47 against the defendant for a number of reliefs.

The applicants’ case is that they executed a consolidated agreement with the defender to amend, restructure and consolidate existing loans between each plaintiff.

At the time the loan restructuring agreement was executed, the total indebtedness of the defendant to the plaintiffs stood at GH¢495.4million, which was to be paid in 15 equal semi-annual capital payment.

However, the defendant has not kept to the agreed installment terms of payment since June 2022.