The Ministry of Finance is set to write off about $120 million of the Tema Oil Refinery’s (TOR) legacy debt as part of efforts to ease the financial burden on the state-owned refinery.
TOR Managing Director Edmond Kombat disclosed this in an interview with JoyNews, saying the move would further reduce the refinery’s outstanding legacy debt of about $400 million.
He said TOR had already undergone an initial debt restructuring exercise, which reduced its historical liabilities.
“So we do have legacy debt on our books. When we did the first phase of the restructuring, we brought it down to about 400 and something million dollars,” he said.
Mr Kombat said the Ministry of Finance had indicated that it would write off part of the debt owed to the government.
“Currently, the Minister of Finance is saying they are going to write off some of the debts that are owed to them,” he said.
“I think they are including this year’s budget. It’s about 120 million dollars. So if that is taken out, it will also further bring the debt down.”
TOR’s major creditors
Mr Kombat said TOR’s remaining legacy debt is made up of five major obligations owed to different creditors.
The creditors include private companies Sahara and BP, as well as state institutions such as the Ghana National Petroleum Corporation and the Volta River Authority.
He said negotiations with the private creditors could be more challenging, but management was exploring options to secure discounts on the outstanding amounts.
The proposed write-off is expected to reduce TOR’s legacy debt further as the refinery works to restore its operations and improve its financial position.
