Cameroon’s SONARA, which operates Central Africa’s biggest refinery, has reached a deal with oil trader Vitol to restructure its commercial debt. The deal had been in the making for some time as the state-owned refining company seeks to restructure its debt, which amounted to 3% of GDP and 6.6% of total public and publicly-guaranteed debt at the end of 2020.
SONARA’s 42,000 barrels per day (bpd) refining facility has been offline since a fire destroyed several of its units in 2019. In October 2021, the company had already managed to reach a revised agreement with local banks to restructure its debt amounting CFAF 261 billion, to be repaid over 10 years with an interest of 5.5% per year. It had since then focused on reaching similar agreements with international lenders.
SONARA’s debt to Vitol amounts to some $279m, which it will be repaid under the same terms (10-year period, 5.5% interest rate). The deal paves the way for the negotiations of similar arrangements with the other international lenders.
Meanwhile, these successful agreements over the restructuring of SONARA’s debt have paved the way for the refinery’s rehabilitation. In April 2022, Presidential approval had been given for the refinery’s rehabilitation and restructuring under a public-private partnership (PPP), according to a letter consulted by Hawilti.