Ghana’s strategic oil stock keeping company, Bulk Oil Storage and Transportation (BOST) Company, is on its way to becoming attractive to investors following its ability to fully settle a 12-year-old GHc64 million credit facility contracted from the Ghana Commercial Bank (GCB).
The loan sourced from GCB in 2008 has attracted several penalties from the bank.
However, Managing Director of BOST, Edwin Nii Obodai Provencal has revealed that his outfit made the final payment of about GHc1.7million last month.
The company is now left with the US$60 million trade debt & Stanchart’s GHc100 million to settle.
“In 2017, when we came to power, we engaged GCB and the good news was that they waived off all penalties and other charges etc, with the promise that they were going to stick to our payment plan. So, that is what we have been doing since 2017, and the good news is that the last bit was cleared last month January. So, we have finished clearing the GCB debt,” Mr Provencal said.
He continued that “we are extremely excited. What this does is that it cleans our balance sheet. It contributes to our balance sheet so we can leverage it to borrow for our operations. We assure that going forward, any other facility we get, we will use a much-disciplined approach to get it.”
According to Mr Provencal, it would take an amount of US$150 million to turn around the operations of the company.
Making a case for the amount, Mr Provencal said about US$75 million of the funds would be used to upgrade and rehabilitate the company’s infrastructure and the other half would be deployed as working capital.
According to him, the new funding would make the company economically viable and lead to the payment of dividend to the government within the next two to three years.
Mr Provencal explained that the needed funds could come from an increase in the BOST margin in the petroleum product price build-up, the government’s support or funding from investors.
He noted that should the option of BOST margin be implemented, it would result in the immediate increase in the prices of fuel, but would in the medium-to-long term, be of great benefit to consumers as BOST’s effectiveness would reduce the price at the pumps.
Mr Provencal said the capital injection would enable the company move from its current state of loss-making and low capitalisation to a profit-making and dividend-paying company.