The Tema Oil Refinery (TOR) is pursuing a multi-track financial restructuring strategy to reduce its staggering US$517 million debt burden, with plans ranging from an independent audit by global accounting firm KPMG to a proposed debt-to-equity conversion requiring cabinet approval.
Managing Director Edmond Kombat disclosed the approach during a working visit by fellows of the Africa Extractives Media Fellowship (AEMF), offering the most detailed public account yet of how the state-owned refinery intends to clean up its balance sheet and restore financial credibility.
By the time the current management assumed office, TOR’s debt had risen to about $517 million, while refining activities had completely halted. The refinery had accumulated losses of approximately GHS10 billion between 2017 and 2024, operated without audited accounts for six years, and owed significant sums to institutions including the Ghana Revenue Authority (GRA), the Social Security and National Insurance Trust (SSNIT), the Electricity Company of Ghana (ECG), and Ghana Water.
As a first step, Kombat said management assembled a dedicated team to renegotiate obligations with creditors, an exercise that revealed an unexpected opportunity. Some creditors, it emerged, also owed money to TOR, opening the door for mutual debt offsets. “I put a team together to renegotiate with most of the people that we owe. And some of them, we realised that they also owed us. So we’ve done a few net-offs, but I think the debt profile has reduced,” he said.
To add independent credibility to the process, TOR has engaged KPMG to review and validate its debt records. Management acknowledged that some liabilities had remained on the books for years despite possible prior settlement, raising questions about the accuracy of the refinery’s historical financial records. The KPMG review is intended to separate legitimate obligations from questionable entries and establish a verified debt figure going forward.
The most structurally significant proposal involves converting certain government-held TOR debt into equity. Since TOR is wholly owned by the state, management has put a formal proposal to the government to treat a portion of what is owed directly to it not as debt to be repaid but as an equity stake in the refinery. The proposal is currently under consideration at cabinet level. Separately, discussions are ongoing with sister state-owned companies, which hold two of TOR’s largest individual liabilities, to explore restructuring or settlement options.
As fellows of the AEMF testified after the visit, the transformation under Kombat is visible, but incomplete. The refinery is operational, and confidence is returning, but the mission is to prove that a state-owned industrial giant can work through results rather than rhetoric.
Management has expressed confidence that the combined restructuring efforts will produce measurable results before the end of the current political cycle, with the goal of completing a comprehensive balance sheet overhaul that can lay the foundation for operational revival and long-term sustainability.
