Tema Oil Refinery Ltd., Ghana’s only processor of crude into fuels, is converting bank loans into a 10-year bond held by lenders in the West African country to reorganize its debt and streamline repayment.

The state-owned company owes banks as much as 950 million cedis ($240 million), Chief Executive Officer Kingsley Awuah-Darko said by phone on Friday. Details of how the bond will be organized should be completed with banks in about three weeks, he said.

Non-performing loans at Ghana’s banks increased to 19.3 percent in May from 14.7 percent at the end of December as lenders started to classify some debt owed by state-owned companies as bad loans, according to the central bank. Tema plans to use funds from a levy collected by the state since 2003 on fuel sales for bond coupon payments, Awuah-Darko said.

“We will use proceeds of the Tema Oil Refinery debt-recovery levy, which is accruing in an account, to service the bond quarterly or semi-annually,” he said. The company is working on a second bond to convert debt owed to creditors, Awuah-Darko said, declining to give details.

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