Wednesday 01, August 2018 by Bloomberg

SocGen and BNP amongst banks exposed to Ivorian Cocoa firm's debt


Côte d'Ivoire’s banking association has asked the government to intervene as its members stand to lose as much as XOF 150 billion in unpaid loans.


Lenders in Ivory Coast are threatening to stop financing cocoa exports unless the government halts the liquidation of a local shipping company, with units of BNP Paribas SA and Societe Generale SA among banks exposed to debt that may not be repaid.

Banks and the government are continuing talks after a court on 18 July ordered the liquidation of Saf-Cacao, which two years ago was the country’s the second-biggest shipper of beans, said the people, who asked not to be identified because they’re not authorised to speak publicly about the matter.

The order was granted after an application by the industry regulator of the world’s biggest cocoa producer, which is seeking to recuperate XOF 7 billion ($12 million) in debt, people familiar with the matter said last week. Banks are exposed to more than XOF 150 billion in unpaid loans and are arguing that lenders stand a better chance of recovering the money if Saf-Cacao continues to trade, they said.

Saf-Cacao’s debt to Ecobank Cote d’Ivoire totals about XOF 15.5 billion and it owes XOF 12.7 billion to the SocGen unit.

Additionally, the cocoa firm also owes XOF 7.4 billion to the local unit of BNP Paribas SA, XOF 38.5 billion to banks of Groupe NSIA as well as XOF 13.1 billion CFA to Banque Atlantique of Cote d’Ivoire and XOF 11.8 billion to Societe Ivoirienne de Banque.

While Saf-Cacao has about 55,000 metric tonnes of cocoa in its warehouses, a portion of the stock is probably of poor quality and of little value after being locked up for months, said two people familiar with the matter.

Spokesmen for the units of Ecobank, SocGen, BNP as well as NSIA, SIB, Banque Atlantique and cocoa regulator Le Conseil du Cafe-Cacao in Abidjan declined to comment when contacted by phone. Government spokesman Sidi Toure and Saf-Cacao liquidator Alain Guillemain did not answer calls seeking comment.

The liquidation of Saf-Cacao comes as banks are still recovering from last season’s wave of contract defaults when shippers reneged on purchasing more than 200,000 tonnes of cocoa after betting wrongly that prices would rise. Non-performing loans in the banking sector rose to 9.9 per cent at the end of 2017, from nine per cent the year before, according to the International Monetary Fund.

Saf-Cacao’s liquidation signals a major turnaround for one of Ivory Coast’s biggest cocoa exporters. The shipper slipped out of the top 10 exporters by size for the main harvest that ended in March, and was cited by KPMG in an audit commissioned by the regulator for 22,425 metric tonnes in contract defaults during the two years through September.


Features & Analyses

Economics Adapting to a new era

  Abdullah Al-Fozan, Chairman of KPMG MESA and KPMG Saudi Arabia, provides an exclusive commentary on the Kingdom’s business… read more