Graphic Business News

US$150m investment needed to revive fortunes of BOST

By: Ama Amankwah Baafi
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 Mr Edward Nii Obodai Provencal speaking to the media after the workshop
Mr Edward Nii Obodai Provencal speaking to the media after the workshop

THE Bulk Oil Storage and Transportation (BOST) will require an amount of US$150 million to revive its fortunes, the newly appointed Managing Director, Mr Edward Nii Obodai Provencal, has said.

He said the amount was needed to fix the tanks, rehabilitate the barges, put in new pipelines and automate depots, among other things, to make the company efficient.

"The key resource we need to achieve our ambition is money. We need it to bring in products, fix infrastructure, trade and pay our debtors," he said in an interview on Saturday, November 2, 2019.

The interview was conducted during a training programme for some members of the Institute of Financial and Economic Journalists (IFEJ) at Dodowa in the Dangme West District.

Mr Provencal noted that the first place for any distressed company to go was its major shareholder, adding that BOST had communicated its needs to the to government.

He said the ministers of finance and energy were working assiduously to give the company some breathing space.

Other sources of finance, he stated, were through internally generated funds (IGF) and partnership with like-minded investors who saw BOST as a potential and were willing to risk their capital.

"It can be either through Build Operate and Transfer (BOT) or any other vehicle to bring in the required resources to turn the company around. We are working on all fronts. As to which one will materialise first will depend on how fast we move," he explained.

Implications for investors
Mr Provencal said seeking investors did not necessarily mean ceding ownership because the investment would definitely have some cash flows to pay back the debt.

"We will still keep our ownership but be innovative around funding through other vehicles to ensure that we keep our national infrastructure and at the same time leverage that money to pay back," he said.

Margin levy
He said the BOST margin levy was still relevant for the company's survival and that historically it had played a significant role in the development and maintenance of BOST infrastructure.

However, he said the doubling of the margin from three to six pesewas as approved in 2017 was yet to be implemented.

"The BOST margin is extremely critical. If for nothing at all, existing equipment will have to be maintained, so we hope that the regulator in the near term will implement the extra three pesewas for the margin," he said.

The workshop
It was organised by the IFEJ in partnership with BOST to keep the media abreast of the operations of BOST as a national energy security asset.

It was held on the theme: “BOST, its structure and operations in the downstream oil sector.”