Mergers, Acquisitions and Financial Results

The Ghanaian government is still locked in conflict with Telekom Malaysia. Although it has indicated its willingness to pay USD50 million for the 15% of shares the company wanted to purchase, it still cannot agree a price on the remaining 30%.

In an interview with Public Agenda Last Friday, Minister Kan Dapah said the USD50 million was a loan and therefore it is fair to pay them back."We have not said we are not going to pay the 50 million, what we are in disagreement is the valuation of the 30 percent shares Telekom Malaysia is demanding."

Kan Dapaah said the recent press release from Telekom Malaysia gives an erroneous impression that the government was in contention over the payment of the USD50 million to the company.

The release also said that the government of Ghana owes a further USD124m (which includes interest on the USD50m). But Kan-Dapaah said this figure is unreasonable and not fair since it is too much.

According to Telekom Malaysia, " efforts to reach an amicable solution have long been rebuffed by the GoG. As a result, Telekom Malaysia has been forced to pursue legal action, and is now seeking full compensation of USD174m for the dispossession of its investments and the losses it has incurred".

Explaining the issues, the Minister said in the year 2000, the company gave USD50 million to the National Democratic Congress (NDC) government to buy an additional 15 percent shares, but the New Patriotic Party (NPP) government turned this offer down when it assumed office.

He said later the company decided that the USD50 million should become a loan to Ghana and the two parties came to an agreement to sit down and sort out the terms of payment.

Later Telekom Malaysia decided to sell its 30 percent shares in GT, which it had purchased at the price of USD38 million, and therefore went for a valuator by name ANZ to value the whole of GT. At the end of the day, the value arrived by ANZ was USD286 million, which meant that Telecom Malaysia claim in GT would be about USD86 million.

Kan-Dapaah said that the government also took out a valuation using PriceWaterhouse who came out with a lower figure of USD106 million. Therefore the government asked the two advisors to come together and reconcile their figures. Upon which the Australian Company, ANZ reviewed it figure to USD120 million.

He explained that Telekom Malaysia refused this new figure, sacked their valuator and sent the matter to international arbitration, which is to be resolved in The Hague, Netherlands in July 2004.

So although the Ghanaian Government is ahead on points, legal action at the Hague is likely to be costly and there is no guarantee that it will get the result it wants. Telekom Malaysia is the richer party and can therefore afford to have its day in Court.

All Africa