Angolan state oil company Sonangol has taken on a loan of US$1 billion from the Standard Chartered Bank to finance operating expenses in 2015, according to the oil company’s annual report.
The loan has a repayment period of five years and was has been taken on at a time of significant financial struggles for the Angolan oil company as a result of the 50% drop in oil revenues, according to Angolan newspaper Novo Jornal.
The annual report admits that due to the “financial position and consolidated results of the Sonangol Group,” taking into account the results of 2015 “it was not possible to fully comply with the required financial covenants,” in credit agreements, such as debt ratios.
This loan joins other previous transactions between Standard Chartered Bank and Sonangol worth US$3.5 billion in two 84-month loans granted in 2014 and is explained due to the “need to strengthen” finance for “structural capital projects and other operating expenses” of the state group in the oil sector.
The document said Sonangol’s net debt to 31 December, 2015, was US$7.5 billion, higher by US$2 billion over the same period of last year.
Long-term debt represented 76% of Sonangol’s total debt at the end of 2015.
The state oil company ended 2015 with assets of US$38.2 billion and equity of US$15.2 billion, including US$284 million in net profit.