The Ghana Cocoa Board (COCOBOD) has disclosed its long term plan to issue a bond to correct the books of the company.
The industry regulator believes the move should help it renew confidence amongst its lenders and sustain its role in developing Ghana’s cocoa sector.
The bond is expected to raise about 2 billion dollars with a repayment period of about twenty years, to clear outstanding debts on the books of COCOBOD.
Deputy CEO in Charge of Finance and Administration at COCOBOD, Ray Ankrah is optimistic that the plan should reduce the company’s finance costs in the long term.
According to him, this is a strategic move to improve the liquidity strength of the cocoa industry regulator.
“The bond will enable us to take up some of the legacy debts that we inherited. Some of the previous debts were issued at very high-interest rates and that is a challenge for COCOBOD. So we are having discussions with various institutions and there is interest in these areas. So the institutions are engaging with us to see how best we can structure something so we can secure some money from the international market to take care of some of our local cocoa bills,†Mr. Ankrah spoke to Citi FM at a meeting with some members of the Executive Management team at Standard Bank Group.
For over two decades, COCOBOD has been pre-financing the purchasing of cocoa beans from farmers through its cocoa syndicated loan.
The arrangement is in partnership with a group of banks which grant credit for the purpose.
For the most recent syndicated loan, COCOBOD secured 1.3 billion dollars from a twenty-one banks including the Standard Bank Group.
In response to when the proposed long term bond may be floated, Ray Ankrah said the outfit is already in negotiations with some financial institutions.
He added that the deal should be sealed soon. Speaking on behalf of the Standard Bank, Group Lead, Steve Hall emphasised the bank’s commitment to the growth of Ghana’s cocoa sector.
COCOBOD is expected to close purchases for the 2018/19 main crop season on Thursday [May 30, 2019]. All things being equal, the Board is expected to meet its target of 900, 000 metric tonnes of cocoa beans.
Credit : Citinewsroom
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