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20.12.2007 Business & Finance

GT Clarifies Bond Issue

By Daily Guide
GT Clarifies Bond Issue

GHANA TELECOM (GT) says the decision to issue $200 million corporate bonds on the international market was to generate enough funds to facilitate quality developmental projects currently on-going.

According to Head of Corporate Communications and Customer Care, Major Albert Don-Chebe (Rtd), the idea was to create a favourable environment for the company which wins the bid for the privatization since the bond issuance would bring more foreign capital to finance expansion projects being undertaken nationwide by GT.

Major Don-Chebe explained that the new arrangement means the number of the company's numerous debtors would be reduced to 'a single entity' because the funds would be used for debt cancellation.

Speaking to CITY AND BUSINESS GUIDE to clarify this initiative in the wake of GT's privatization, Don-Chebe stressed that “instead of paying a lot of debts with high interests of almost 18 per cent, this third party facility has a low interest rate arrangement of 8.5 per cent which will invariably aid balancing our books”.

He added that his outfit had put in place concrete measures to facilitate the rolling out of facilities which would improve customer service delivery.

“We are going to roll out more facilities and since the telecommunication industry is capital intensive, issuance of the bond was in the right direction,” he noted, adding, “it's not new, our competitors are generating capital through other means”.

Ghana Telecommunications Company Limited recently issued $200 million corporate bonds on the international capital market.

The bond is the first United States currency denominated African corporate bond to be issued outside South Africa and Nigeria.

The GT notes carry an 8.5 per cent coupon and repayable annually in five equal installments of $40 million.

The maturity is on October 29, 2012.

The GT notes were arranged by Iroko Securities Limited, and placed by Iroko Financial Products Limited and Exotix Limited.

By Patrick Baidoo