Shareholders of the troubled tobacco firm, British American Tobacco Company Limited (BAT) are on Tuesday expected to give their assent to the formal delisting of the Company from the Ghana Stock Exchange.
At the Company's annual general meeting to be held today, shareholders will have no choice but to move a motion to delist the company from the local bourse.
The Business &Financial Times newspaper says it has learnt that the global tobacco group, British American Tobacco (BAT) Investment RV has already paid more than $15 million to its Ghanaian shareholders.
The pay-off, which started on February 6, saw BAT Investment paying for 30,652,820 ordinary shares priced at 4,266 cedis per share.
A letter from HSBC London, bankers for BAT Investment, written to the Ghana Stock Exchange and the Securities and Exchange Commission in December 2006 informing the regula¬tory agencies of its client's decision to pay off the Ghanaian shareholders due to the shut down.
The Board and Management of BAT in 2006, decided to quit its manufacturing activities after 44 years in Ghana citing unfair trade competition and government's failure to deal ruthlessly with the growing incidence of smuggling activities along the country's borders.
Smuggling of contraband cigarettes into the country cost the Government over US$3.5 million revenue every year.
Available figures indicate that five years ago, the smugglers controlled two per cent of the cigarette market; however, presently the figure has shot up to 15 percent.
Until the shutdown, the company paid 22 billion cedis in taxes to government every month from the sale of 1.5 billion sticks of cigarette a year.
The turnover of BAT in 2006 increased by 9.6 percent from the 237.8 billion cedis recorded in 2005 to 260 billion cedis.
However the cigarette manufacturer recorded a 3.4 percent decline in sales volume from 1.51 billion sticks in 2005 to 1.46 billion sticks in 2006.
BAT made a loss before tax of 19.3 billion cedis at the end of the 2006 financial year, comparing unfavourably with the profit of 40.4 billion cedis recorded in 2005.
Management has attributed this to the costs associated with labour redundancy that came along with the shut down of its operations.
More than 180 workers have lost their jobs as a result.
Credit: B&FT
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