Engineers and Planners denies contributing to Merchant bank?s debts

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Engineers and Planners, a company owned by President John Mahama?s younger brother, Ibrahim Mahama, has denied allegations that it contributed to the huge debts at Merchant Bank.

The New Patriotic Party (NPP) on Tuesday alleged that the failure of the company to pay its over GHC 50 million loan caused the bank to struggle until a South African bank, FirstRand, acquired majority stake.

But a statement issued by Engineers and Planners indicated that some technicalities caused the repayment of the loan to drag insisting there is a payment plan the company is following.

In a statement issued by the company’s Chief Finance Officer, Sulemana Ahmed Amidu Engineers & Planners is the largest indigenous (Ghanaian) contract mining company, established in 1997, and employs over 1,500 Ghanaians.

It currently operates in Ghana and Liberia and hopes to begin operations in Congo soon.

According to him,? due to high capital expenditure in the mining industry, most of the mining companies and their contractors obtain financing from both local and international banks, thus creating fees and income for the
banks.

“It is a well-known business strategy in the mining industry to borrow on a long-term basis. Engineers & Planners contracted financing from two local banks during the previous NPP administration as a five-year term loan.”

He continued to state that “Subsequently, for some unknown reason, the banks in 2007 suddenly converted the financing into a three-year term loan. Naturally this created debt repayment difficulties for Engineers & Planners.
Under the previous and current administration, arrangements have been made to refinance the loan through a multilateral funding agency. “

He explained that Engineers & Planners is mindful of its confidentiality obligations to third parties regarding the steps that are being taken to re-finance the debt, and therefore, is unable to reveal the details of the funding.

According to the Chief Finance Officer of the company, “it has been approved after due diligence, which proves that Engineers & Planners is a strong and viable company which has robust cash flows to support a well structured financing.”

The Finance documents, he noted, have been signed, stamp duty and other fees in excess of GHs 2 million have been paid on all documents and collateral registered here in Ghana.

“Engineers & Planners remains fully committed to the repayment of the loan, and is hopeful that the funds towards its settlement will be disbursed soon.?

Notwithstanding, a minority shareholder at Merchant Bank, the Social Security and National Insurance Trust (SSNIT) who was speaking on Citi Fm said the total debt at the bank is expected to be collected in three years.

The Director General of SSNIT, Dr. Frank Odoom said they needed to do a structure that will make the bank go on whilst they look at the math.

“So it?s not that we took the math and threw it aside. I believe that three years from now, we can have a conversation here and I?d tell you the success rate in collecting the bad debt.?

Assuring the Ghanaian public of an 85 percent probability to collect the debt.

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