SSNIT unable to recover repayment of over GH¢800 million in loans from 7 companies | General news


The Auditor General has determined that the management of SSNIT is unable to collect repayment of loan facilities totaling GH¢858,380,662.10 from seven (7) companies.

The Auditor General recommended that management review the loan portfolios with the respective companies and put in place measures to recover them.

The report recommended that management take possession of the underlying assets of failing companies to repay part of the loans.

It was further recommended that management seek court redress, if necessary, to recover the loans.

Management explained that while these loans are all legacy facilities, they are currently taking various steps to pursue their recoveries, including the following:

RSS Developers Ltd. (Loans1, 2, 3).

Loan 1 – The equivalent of US$50.0 million in Ghana cedi was disbursed in tranches to the company in 2011 (April, June and December).

Loan 2 – Ghana cedi equivalent of US$115.0 million was disbursed to the company in tranches as follows:

2013 (January, February, April, September and October).

2014 (March and April).

2015 (August and September).

Loan 3 (Bridge) – Amount approved $17.0 million. The Trust disbursed the equivalent of US$12.75 million in Ghana cedi in two tranches to the company in November 2014 and February 2015. The company was to repay the loan with proceeds from the sale of its property developments.

The development however faced a myriad of challenges including a downturn in the real estate market, overpriced development units and the inability of the contractor, as a partner in the business, to complete the development, which, in our view, stems from the entrepreneur’s own financial challenges.

SSNIT has swapped some of its debt with the company’s completed homes to reduce its financial exposure. SSNIT management has put in place a new Investment Policy and Guidelines document to guide the Trust on such transactions going forward, which understands that SSNIT will not enter into any joint venture agreement in which a joint venture partner will be the joint venture project contractor. is to be undertaken. SSNIT is preparing to aggressively market the sale of the units that have been repossessed.

Aluworks Limited

Aluworks defaulted on its contractual obligations to the Trust due to financial and operational difficulties arising from what they said was unfair competition from abroad.

SSNIT purchased land from Aluworks to enable the company to obtain funds to pay its debt to VALCO and obtain funds for working capital. The proceeds were used for this purpose and therefore the company currently has a credit balance with VALCO. This freed up working capital, which made it easier to run the business. Discussions for a strategic investor are still ongoing.

Aluworks Ltd., being a publicly listed company, is preparing to hold an Annual General Meeting (AGM) tentatively scheduled for October 2021 where it will table a strategic investor’s SSNIT proposal for shareholder discussion and direction. A draft resolution for consideration at the AGM has been received from company management. Injections from a strategic investor will be used to repay a significant portion of SSNIT’s debt.

Developers Switchback Limited

Construction of Phase I of the project experienced delays due to a lack of adequate construction funding. The proceeds of sale received, which were to be used to pay the loan, were used for the construction. Thus, the company’s inability to repay the loan when due.

Phase I of the project is approximately 95% complete. The Trust injected funds by acquiring 6.18 acres of land and responded to a rights issue to buy apartments at a steep discount. Sales are ongoing and the loans are expected to be repaid from the proceeds. In addition, the shareholders also plan to sell additional plots of land. Land and apartment sales are expected to exceed loan values.

The 2021 Unlisted Company Investment Reports showed that the Trust has over US$206 million of its investable funds locked up in 4 joint ventures. The four projects cost over US$240 million. We recommended that the Trust take steps to reduce its exposure to these projects.

Management again indicated that the four joint ventures were legacy investments, some dating back to 2008. However, in the case of West Hills Ridge Company Ltd, the current SSNIT management/board of directors conducted an audit of optimization of company resources. The audit saved the company US$30 million in construction cost.

SSNIT has further halted the continuation of Phase 2 except for six blocks whose construction has been brought forward and the Sports Center which is a much needed complementary facility. The project continues steadily with ongoing sales for completed units.

Management recorded a surplus of GH¢1.1 billion in the 2020 financial year, compared to a deficit of GH¢472 million recorded in 2019. This represents a 314.4% increase in the Trust’s financial performance during the period.


Disclaimer: The opinions expressed here are those of the authors and do not reflect those of assumes no legal or other responsibility for the accuracy of their content. Please report any inappropriate content to us, and we will evaluate it first.

Featured video


Comments are closed.