The Ghana Cocoa Board (COCOBOD) has announced an extension of the closing date for its debt exchange offer programme, aimed at managing debt securities and providing investors with enhanced investment opportunities.
The decision to extend the closing date, the cocoa sector regulator said, was necessitated by an error in the previously announced date, coinciding with a statutory public holiday.
The voluntary cocoa bills exchange programme, launched on July 14, 2023, allows holders of COCOBOD’s short-term debt securities to swap their bills for longer-term debt securities issued by COCOBOD. The original offer period was set to close on July 31, 2023 and August 4, 2023. However, COCOBOD has now clarified that the correct closure date is August 3, 2023 at 4 pm, instead of August 4, 2023, which has been declared a statutory public holiday by the Minister of Interior.
“We refer to the debt securities exchange programme launched by the Ghana Cocoa Board (COCOBOD) on 14th July, 2023 (the Exchange Programme). It would be recalled that the transaction timetable provided in press releases and the exchange memorandum in relation to the Exchange Programme (the Exchange Memorandum) states that the offer period for the Exchange Programme opened at 4pm on 14th July, 2023 and closes at 4pm on 31st July, 2023 and 4th August, 2023. The date in the press release was in error; therefore, the 4th August date is the correct closure date,” a statement from COCOBOD read.
“Subsequently, by a press release issued on 26th July, 2023, the Minister of Interior has declared 4th August, 2023 as a statutory public holiday and mandated that the day should be observed as such throughout the country. In compliance with the directive regarding the observation of 4th August, 2023 as a statutory public holiday, we urge all persons who intend to participate in the Exchange Programme to submit their applications by 4pm on 3rd August, 2023 instead of 4th August, 2023, which is now a public holiday,” it added.
COCOBOD has confirmed that all other dates in the transaction timetable, as outlined in the Exchange Memorandum, remain unchanged unless specifically extended by COCOBOD – in its sole discretion and with the prior approval of the Securities and Exchange Commission. It added that the window to exchange cocoa bills had been closed.
The exchange programme, worth GH¢7.93billion, seeks to replace existing bonds with updated ones featuring modified terms, aiming to improve the organisation’s debt management and provide investors with a more attractive investment option. Holders whose offers are accepted will receive five different bonds, maturing annually from 2024 to 2028, with a total principal amount equal to the principal amount of cocoa bills tendered.
This development comes as local banks have been advocating for improved terms in the restructuring of cocoa bill holdings. The government has proposed replacing the bills with five new bonds, raising concerns about the potential negative impact on the financial records of the holders.
Recently, the government struck a deal with local banks to revamp around GH¢15billion (US$1.35billion) worth of USD bonds and cocoa bills issued domestically. The agreement entails converting the USD bonds into two-term loans with reduced interest rates, while the cocoa bills will be transformed into a new bond, offering a yield of 12 percent.
COCOBOD has said that the exchange programme aims to address challenges in cocoa farming and exports, ensuring the sustainability of the cocoa industry, workforce and export market. The volatility of cocoa prices in the international market has made financial commitments uncertain, making exchange programmes a viable solution.
The exchange programme is expected to promote savings, reduce debt costs, lower coupon rates for bonds, and offer increased investment options. By inspiring trust among investors and encouraging them to participate in the exchange, COCOBOD aims to boost confidence in Ghana’s cocoa industry.
The COCOBOD’s debt exchange programme has generated considerable interest and is seen as a step toward strengthening the cocoa sector and promoting sustainable economic growth in Ghana.
