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Globeleq to sell its about XAF83 bln receivables owed by ENEO

Globeleq to sell its about XAF83 bln receivables owed by ENEO
  • Comments   -   Monday, 26 April 2021 11:52

(Business in Cameroon) - Through its local subsidiaries Kribi Power Development Corporation (KPDC) and Dibamba Power Development Corporation (DPDC), independent power producer Globeleq commissioned BGFIBank Cameroon to arrange the restructuring of the debt it is owed by electric utility ENEO. Estimated at XAF83 billion, this debt represents the unpaid energy bills accumulated by ENEO between 2015 and 2020.

In 2020, ENEO promised to pay, within 48 months, its debt towards the power producer that supplies a significant portion of the distributed energy (in 2019, Globeleq supplied 17% of the power distributed by ENEO).   Globeleq is not intent on waiting for that deadline revealed by ENEO’s management. The power producer indicates that such an amount is essential for its operations. According to the figures published by Globeleq, the XAF83 billion debt exceeds by about XAF20 billion both KPDC and DPDC’s cumulated net profits over the past three years.

 Opportunity

The restructuring operation, confirmed by ENEO’s CEO Éric Mansuy, is an opportunity for BGFI Bank Cameroon and the various local banks that will partner with it in that operation. Indeed, they will buy the debt at an amount that is several billion lower than the initial XAF83 billion. Also, they will perceive yearly interests on the debt during the whole amortization period.

For ENEO, the operation will allow it a longer amortization period (longer than the initial 48 months deadline it set).

As the discussions are still at a preliminary stage (as revealed by Eric Mansuy about ten days ago), nobody can tell the specific details of the restructuring operation. Nevertheless, looking at the current market conditions, one can guess that the bank involved will gain tens of billions for taking a controlled risk.

Currently, the electricity sector is a profitable one. Indeed, according to ENEO, the cumulated profit generated between 2021 and 2025 could be around XAF165 billion. Also, the government, which controls 44% of ENEO, is moving to restore financial equilibrium in the sector. For instance, it promised to transfer XAF1 billion to ENEO weekly for its electricity consumption to avoid accumulating unpaid bills as it used to. In 2020, it also started settling its payment arrears by paying XAF45 billion to ENEO.

Preconditions

During an interview with Business in Cameroon, Eric Mansuy revealed that there were some important preconditions to be met before the conclusion of that restructuring operation. Recently, the government of Cameroon met one of those preconditions with the assumption (by the government) of ALUCAM’s over XAF34 billion debt to ENEO (as consecrated by a document signed by Minister of Finance Louis Paul Motaze).

The conclusion of negotiations for the payment of about XAF32 billion to settle the about XAF40.1 billion debt the government was owing ENEO (as of the end of 2020) is also a positive sign. Another positive sign is the conclusions of negotiations aimed at compensating the unamortized investments made by ENEO on the distribution network transferred to SONATREL (the compensation claimed by ENEO is XAF40 billion).

Aboudi Ottou

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