Mergers, Acquisitions and Financial Results

The government is negotiating with Telekom Malaysia to buy its 30 per cent stake in Ghana Telecommunications Company (GhanaTelecom)and float it to the public. A source at the Ministry of Communications, which disclosed this in an interview,said the value of the shares, which was acquired for USD30 million by Telekom Malaysia in the late 1990s,had been over-valued,hence the negotiation to bring the price to an appreciable level.

“The government is waiting to buy back the 30 per cent share that Telekom Malaysia,the minority shareholder, currently controls in the company and publicly float it on the Ghana Stock Exchange (GSE) to the Ghanaian public,” it said.It said the government would raise more money through the sale of the shares to finance part of the expansion project of the company.

The source said considering the successful sale of shares by two institutions on the GSE in the last six months of 2004, there was no doubt that the money expected from the intended sale could be easily raised. Last year,the shares floated by the Benso Oil Palm Plantation (BOPP) on the GSE was over-subscribed by more than 170 per cent,while those of CAL Bank were also over-subscribed by over 300 per cent,a situation which forced the bank to return about ¢234 billion it mopped through the floatation back into the economy.

The source said “considering these achievements, there is no doubt that GhanaTelecom’s shares will also perform”. On the international arbitration between the government and the minority shareholder,the source said that the matter has been amicably resolved. Whether Ghana's investors will want to buy into a loss-making company remains to be seen.