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Monday, January 20, 2014
Victoria Oil & Gas (VOG) signed a loan agreement and customs bond facility between its Cameroonian operating subsidiary, Gaz du Cameroun (GDC) and BGFI Bank (BGFI) of Cameroon. The principal facility of XAF 4,000,000,000 ($8.3 million) will be deployed by GDC to fund its share of near-term revenue producing customer connection work. This includes pipeline extensions for recently signed Dangote Cement and will also support the installation of gensets to customers such as Guinness, Icrafon, Camlait, and SCTB.
The facility is for an initial term of six months, which is renewable once on the same terms for a further six-month period, with interest payable at a rate of 7.25% per annum. It can then be converted into a three-year term loan re-payable in 36 monthly installments at the same interest rate.
VOG’s second facility agreed to with BGFI is for a 12-month XAF 800,000,000 ($1.7 million) customs bond to be provided to Cameroon Customs in support of the temporary import of the gensets, which have recently been released to GDC following the grant of a temporary import license by Cameroon’s ministry of finance and reduction in the applicable duty payable. The bond allows GDC to import the gensets without payment of import duty for a period of one year from release. At the end of the year, GDC can apply for an automatic 12-month extension of this exemption, or the gensets can be re-exported without payment of the duty.
VOG chairman Kevin Foo said, “The provision of local finance to local businesses in Cameroon is crucial for industrial growth and I am delighted to see how BGFI, a leading African Bank, has stepped up to support GDC in this phase of our business. I am also very pleased that this facility has been initiated and closed entirely by our local GDC team.”
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