BDCs bank debts to reduce by over Ghc 500 million

By Sam Edem

The debt owed banks in the country by Bulk Oil Distribution companies (BDCs) is expected to reduce significantly in the course of the week.

The anticipated reduction based on information to the media about funds disbursed from the energy bond on Wednesday 8th November 2017 to Legacy Bond Limited (LBL) for onward distribution to the indebted BDCs.

Managing Director of CAL Bank, Frank Adu Junior, said: “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”.

LBL is an institution jointly established by the Chamber of Bulk Oil Distributors (CBOD) and the Ghana Association of Bankers (GAB), tasked with repayment of the legacy debt.

However, there have been no statement on the exact amount owed by the BDCs to Ghana’s banks but a source closed to the institution hinted that the total indebtedness of the oil dealers stood at about Ghc1.2 billion as of December 31st, 2016.

More so, there are indications that the figure has been greatly increased – particularly on the basis of foreign exchange losses as well as accumulated interest on the debt.

On another development around the energy sector debt, there are speculations that at least Ghc170 million currently being audited for payment which are expected to begin this month – November end.