Cameroon: XAF 48B needed to save state textile firm CICAM from bankruptcy
XAF48.2 billion is needed to save state textile firm CICAM from bankruptcy, reveals the Technical Commission for the Rehabilitation of Public and Para public Sector Enterprises (CTR) in its 2020 report on state and parastatal firms.
Indeed, the CTR indicates, the Ministry of Finance and Cameroonian consulting firm CAEAC (Cabinet camerounais d’études et d’audit comptable) carried out a study on the financial supports needed to ensure the sustainability of CICAM. The first support suggested by the study is a cancellation of CICAM’s public debt (notably the tax, social, and shareholder) estimated at XAF9.6 billion. The second support is the settlement of the textile company’s bank and commercial debts estimated at XAF12.6 billion by either outrightly refunding it, pre-funding it, or even proceeding to a partial or full capitalization. In addition, the firm’s financing needs until 2025 which must be provided include XAF19 billion for investment and maintenance of its equipment and XAF7 billion for operating expenses.
For the CTR, CICAM (established in 1965 with a XAF1.15 billion share capital) is already bankrupt. Once again, it reached a critical level due to accumulated losses. In 2020, its equity dropped by 72.45%. Since July 21, 2021, the turbines it uses to produce printed fabrics and towels have been off.
Let’s note that in 2020, the firm’s net loss was estimated to be over XAF3.552 billion.
Source: Ecofin Agency