Petromoc needs to raise 7 billion meticais

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Petromoc needs to raise 7 billion meticais

1:54 CAT | 15 Aug 2019

Picture: O País

Mozambique state-owned fuel distributor Petromoc needs an injection of seven billion meticais (around US$125.9 million at current exchange rates) to normalise its position in the market. Over-indebted and with a cashless main shareholder – the state – the company is straining not to file for bankruptcy, ‘O País’ reports..

The Chairman of Petromoc’s Board of Directors, Hélder Chabisse, acknowledges the difficulties of the public oil company, but does not want to pass its full recovery costs onto the state, knowing that its main shareholder is also going through financial difficulties.

But the company needs to raise money.

“Right now, negative equity capital stands at around 7 billion meticais. It would be unrealistic of us as management to ask for an intervention of this magnitude from the shareholder,” Chabisse admits.

Petromoc has its debtors, but these also include companies facing financial problems themselves, such as LAM.

“LAM owes two billion (meticais), but we also have debt by the very nature of our operation, in a highly competitive market,” Chabisse adds.

But how has Petromoc ended up in such a morass of difficulties?

“The company has the largest distribution network, the largest market share and therefore had the largest import volume. In a situation where we have a deficit which we call a regulatory deficit, the burden on the company is higher and the company has had to go into debt for that reason,” Chairman Chabisse explains.

Petromoc’s net results registered negative every year from 2015 to 2018.

By Orlando Macuácua

Source: O País