The Managing Director of the Tema Oil Refinery (TOR), Edmond Kombat, has announced that the Finance Ministry intends to write off approximately $120 million of the company's legacy debt. This disclosure was made during a visit by Parliament's Energy Committee to the refinery. The move aims to alleviate the financial strain on the state-owned refinery. TOR's legacy debt currently stands at around $400 million, following an earlier restructuring exercise.
According to Mr. Kombat, the planned debt write-off will be included in the 2026 budget, leading to a further reduction in the refinery's outstanding liabilities. The current debt of $400 million is a result of a previous restructuring phase. The Finance Ministry's initiative to write off $120 million of the debt is expected to significantly ease TOR's financial burden.
Despite the planned write-off, TOR still has substantial debts to private companies and other state-owned institutions. Sahara and BP are among TOR's private creditors, with management engaging them to negotiate possible reductions in the amounts owed. The refinery's debt to these private entities remains a significant challenge.
In addition to private creditors, TOR also owes the Ghana National Petroleum Corporation (GNPC) and the Volta River Authority (VRA). Mr. Kombat appealed to the Energy Committee to assist management in resolving these obligations, as they are state institutions. He requested the committee's help in negotiating a settlement with GNPC and VRA.
The proposed debt relief is expected to improve TOR's financial position and reduce the burden of its accumulated legacy obligations. By writing off $120 million of the debt, the Finance Ministry aims to help the refinery recover from its financial difficulties. This move is seen as a positive step towards stabilizing TOR's operations.
TOR's Managing Director emphasized the importance of resolving the refinery's debt issues to ensure its continued operation. The company is working to negotiate with its creditors and secure a more stable financial future. The Energy Committee's support in this matter is crucial, as it will help facilitate discussions with state institutions and private creditors.
The Finance Ministry's plan to write off $120 million of TOR's legacy debt is a significant development in the refinery's efforts to overcome its financial challenges. With the support of the Energy Committee and other stakeholders, TOR aims to achieve a more sustainable financial position and continue its operations effectively.
Key points
- The Finance Ministry plans to write off $120 million of TOR's legacy debt.
- TOR's legacy debt currently stands at around $400 million.
- The debt write-off will be included in the 2026 budget.
