The national refining company Sonara has reached a debt restructuring agreement with Swiss trader Mercuria Energy Trading. The agreement, signed on December 12 in Yaoundé after several months of negotiation and facilitated by the Ministry of Finance (Minfi), involves an amount of CFA20 billion, we learned.

Per their agreement, Mercuria Energy Trading authorizes Cameroon to repay the amount over 10 years, with an annual interest rate of 5.5% excluding taxes. The trader thus becomes the fourth with whom the Cameroonian State, committed to settling Sonara’s debts, has reached a compromise.

Similar deals were previously reached with Swiss trader Trafigura (September 29, 2023, for CFA14.5 billion), PSTV (January 26, 2023, for CFA8.5 billion), and Swiss trader Vitol (September 22, 2022, for CFA185 billion). They have all agreed to reschedule the repayment of Sonara’s debt over 10 years, with an annual interest rate of 5.5% excluding taxes.

According to Finance Minister Louis Paul Motaze, this fourth stage of the Sonara debt restructuring and repayment process with traders “will be completed during the first quarter of 2024” with the conclusion of two other agreements with traders Petra Energy and Addax Energy. The government official had previously announced the completion of this process by October 2023.

As a reminder, Sonara found itself in this situation mainly after the fire that ravaged its facilities in May 2019 in Limbe (Southwest).  The company now struggles to meet its commitments and carries a debt of CFA374 billion with traders and suppliers of crude oil and finished petroleum products. As of the end of September 2023, the refinery accumulated a debt of CFA425.5 billion with its foreign suppliers, representing 83.2% of the overall outstanding debt of public enterprises, as revealed by the Sinking Fund (CAA) in its latest monthly public debt outlook for Cameroon.

Source: Business in Cameroon