Cameroonian state electricity firm unable to pay creditors despite profits

In a recent interview published by Eneo, Eric Mansuy, the new CEO of the Cameroonian subsidiary of the British company Actis, explains why the electrician “  cannot pay its suppliers when its balance sheet establishes a profit of more than 11 billion FCFA in 2018  ”.

“  The balance sheet effectively establishes a profit. But, it is an accounting result. Cash, meanwhile, remains very tight. This results in a cash flow problem due to the arrears accumulated by some of our large customers, mainly,  ”he said.

In its 2018 annual report, Eneo points to the State as its largest debtor with a debt of nearly 39 billion FCFA including an unpaid 11 billion from the defunct Cameroonian water company (CDE) which it endorsed after the renationalization of the service distribution of drinking water. Large companies, such as Alucam (nearly 6 billion) or Sonara (1.4 billion), were also among the insolvent.

At the end of 2018, Eneo was even technically in a liquidity crisis. Its current assets (i.e. convertible into liquidity in less than 12 months) could only cover 70% of its short-term debt in the amount of CFAF 306.7 billion, of which 171 billion were supplier debts and 49 billion tax and social debts.

Among Eneo’s suppliers is the natural gas producer Gaz du Cameroun, a subsidiary of Victoria Oil & Gas (VOG). In January 2018, Eneo had temporarily suspended its purchases of gas from VOG, intended for the Logbada thermal power plant, due to a debt of nearly $ 200 million that the electrician was struggling to repay.

 

Source: Agence Ecofin

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