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Ghana, bondholders finalize preliminary $13 billion debt agreement

Published

4 months ago

June 25, 2024

Ghana announced on Monday that it had reached the final stages of a debt reform, becoming the second African nation this month, after reaching an agreement in principle with two bondholder organizations to restructure over $13 billion of its debt.

Under the terms of the agreement, bondholders in Ghana will forfeit around $4.7 billion of their loans, resulting in approximately $4.4 billion in cash flow relief until 2026, when the country’s current International Monetary Fund (IMF) programme ends.

“The formal launch of the consent solicitation is expected in the upcoming weeks,” the proposal, if approved, would allow the nation to avoid default, the administration stated, alluding to the process of presenting the proposal to all of its bondholders.

The initial information about the agreement, which will essentially equate to a 37% “haircut” in the bond market, was released by Reuters on Thursday.

The accord was deemed “a significant positive step” for Ghana by the IMF. The committee on behalf of its foreign bondholders declared that it would provide a route for the nation’s economic recuperation.

Following Ghana’s recent arrangement with its bilateral creditors and another slow-moving restructuring in Zambia earlier this month, the deal was made quickly.

The 18 months Ghana took “has been much faster” than Zambia’s, according to S&P Global Market Intelligence analyst Theo Acheampong, and this could help the country recover. A request for response was not answered by the Paris Club of Creditor Nations, which typically handles communications for official creditors.

However, the government noted that the official creditor committee, which is co-chaired by China and France, considered the deal to be a reasonable starting point for discussing its “Comparability of Treatment” concept, which is an analysis meant to make sure bondholders don’t receive too favourable conditions.

Bondholders now own two choices. One is a “disco bond,” with maturities spanning from 2026 to 2029 and an interest rate of 5% that will increase to 6% after mid-2028. It involves a 37% haircut or write-down of “principle.”

The second is a $1.6 billion par bond option with three instruments, the principal of which will mature in 2037 with no haircut other than a write-down of past-due interest and pay a 1.5% yield.

The government stated that about a different bond that is partially guaranteed by the World Bank, the unprotected section will be regarded similarly to the other portion of the nation’s bonds, and the multilateral lender will completely pay the guaranteed portion to investors.

Related Topics:Bond Holders Featured Ghana

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Nigeria to supply gas to $3.5 billion petrochemical facility

Published

3 days ago

October 12, 2024

Ifeoluwa Dada

According to an official cited by Reuters, Nigeria has made significant progress in generating income from its enormous gas reserves as it entered into agreements with joint venture partners to supply gas to a proposed $3.5 billion Brass fertiliser and petrochemical facility.

According to the deal, the facility in Brass, in the coastal state of Bayelsa, Nigeria, will receive an estimated 270 million standard cubic feet of gas per day from joint venture partners Shell, TotalEnergies, and Eni.

The Gas Sale and Purchase Agreement, which is a component of the Brass Fertiliser and Petrochemical Project, is anticipated to produce at least $1.5 billion in exports of petrochemicals and other gas-based goods each year, according to Petroleum Ministry Permanent Secretary Nicholas Agbo Ella.

“This agreement represents a significant milestone in our ongoing efforts to monetize Nigeria’s vast gas reserves,” Ella said.

Nigeria, the continent’s leading energy producer, aims to develop its gas reserves, which total over 200 trillion cubic feet. The goal is to eliminate routine flaring by 2030 and increase gas supply to power plants, industry, and exports.

“In addition to boosting exports, the project will reduce fertilizer imports by 30%, saving Nigeria approximately $200 million in foreign exchange annually,” Ella said.

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Fortuna Mining says Burkina Faso won’t scrap permits

Published

6 days ago

October 9, 2024

Ifeoluwa Dada

The Burkina Faso government does not intend to revoke Fortuna Mining’s current mining permits within the nation, the Canadian company said on Monday.

Ibrahim Traoré, the leader of the Junta, stated on Saturday that Burkina Faso intended to remove some mining permissions from international businesses and work towards increasing local gold production. However, he did not specify which permits would be revoked.

The entire index fell on Monday as shares of gold miners with projects in the West African nation plummeted precipitously at the Toronto Stock Exchange.

Fortuna Mining’s stock was down 9% at 3:25 PM ET (19:25 GMT). The owner of the Bombero gold mine, Orezone Gold Corp., had a 9% decrease on the TSX.

In addition to addressing several subjects on Saturday to mark two years as president, gold producer Endeavour Mining said Traor hinted that some mining permits would be cancelled.

Endeavour asserted that it is unaware of any intentions to cancel any of the company’s mining permits and that the government continues to support the business.

Growing insecurity has made things more difficult in West African country despite its rich mineral resources. ACLED, a U.S.-based crisis-monitoring organisation, asserts that in 2023, over 8,000 individuals lost their lives in the nation, even though the junta promised to suppress groups linked to Al Qaeda and the Islamic State.

Burkina Faso has witnessed a boom in the mining sector since the early 2000s, primarily in the gold but also in the zinc and manganese industries. At the moment, the country is Africa’s fifth-largest producer of gold.