The move forms part of ongoing efforts in restructuring energy sector debt
Energy sector bond issuer E.S.L.A. PLC has announced an intention to redeem about GH¢3.47billion in outstanding bonds, as part of ongoing efforts in restructuring energy sector debt.
The company, in a statement on Tuesday, November 5, announced that it will engage bondholders to redeem these bonds at par on December 2, 2024 – in line with Ghana’s broader debt restructuring plans.
The redemption plan follows a 90 percent buyback of GH¢1.04billion in bonds, completed in October, which reduced the company’s liabilities.
The bonds targetted for redemption include tranches E2, E3, E4 and E5, with maturity dates between 2027 and 2033. Through this initiative, E.S.L.A. PLC is aiming to bring down the debt burden for the sector and provide relief to its bondholders.
E.S.L.A. PLC was established in 2017 as a special purpose vehicle to address Ghana’s energy sector debt by issuing debt securities, backed by an energy debt recovery levy under the Energy Sector Levy Act, 2015.
Over the years, the issuer has raised around GH¢10.5billion, with GH¢8.4billion still outstanding as of December 2022.
A virtual meeting for bondholders is set for November 26, 2024, where stakeholders will discuss modifications to the bond maturity and interest payment dates in line with the planned December 2 redemption. Bondholders will have an opportunity to vote on the proposal to advance the redemption date.
“This meeting aims to authorise modification of the final maturity or redemption date and interest payment dates of all the company’s outstanding bonds to Monday, 2nd December 2024,” the company stated in a formal notice to investors.
The company’s financial position has improved, which supports its buyback efforts. According to unaudited financial statements ending in September 2024, the company reported GH¢5.32billion assets with GH¢3.79billion in cash.
Liabilities dropped from GH¢5.03 billion in September 2023 to GH¢4.81 billion in September 2024. Additionally, E.S.L.A. PLC’s profits saw significant growth, reaching GH¢165.75 million as of the third quarter of 2024, compared to GH¢51.90 million in the same period in 2023.
The issuer’s financial strategy aligns with Ghana’s broader debt sustainability goals, including the government’s Domestic Debt Exchange Programme (DDEP), which offered bondholders new government bonds in exchange for E.S.L.A. PLC bonds.
This strategy has allowed for substantial debt reduction and offers bondholders a chance to settle earlier than scheduled.
Bondholders are encouraged to attend the upcoming virtual meeting, either personally or through proxies.
This engagement aims to secure consensus for E.S.L.A. PLC’s debt restructuring plan, offering both financial stability to the company and a clearer path toward addressing Ghana’s energy sector debt challenges.