Parliament yesterday ratified the sale and purchase agreement of 70 per cent of issued and fully paid up shares of the Volta Aluminium Company Limited (VALCO), without any objection from the Minority side which last week raised concerns about the deal.
Under the Agreement, Government of Ghana is to sell its 70 per cent holdings of issued and fully paid shares of VALCO to International Aluminium Partners for US$175 million as first step towards the development of an integrated aluminium industry envisaged by the first President of Ghana 47 years ago.
The whole integrated process is estimated at US$ 4.7 billion. The Agreement was laid before the House last week Wednesday, October 29, 2008, and subsequently referred to the Joint Committee on Finance, Trade, Industry and Tourism, for consideration and report.
The outstanding amount of US$ 150.5 million is to be paid within 45 working days after the VALCO smelter has commenced production with two pot lines in normal operation, the execution of the transfer of shares by the Government, shareholders agreement between the shareholders of the company and the delivery of the share certificate signed by VALCO in favour of the consortium.
On the issue of power supply, the Committee Report said the Minister of Energy assured the Committee that the power needs of the country is currently at 1200 megawatts but about 1900 of power is generated presently.
Concerning the valuation of the Company, the Report said the Minister of Trade assured the Committee that valuation was done in 2004 prior to government's acquisition of VALCO, and have since then been no additions to the company to warrant another valuation.
The Report further said valuation was carried on by ALCOA in July 2008 for the sale of its 10 per cent shares to Government of Ghana, and based on that valuation, the 10 per cent shares were sold to Government of Ghana at US$2 million, but Government has however managed to negotiate 70 per cent of its shares in August 2008 for US$175.5 million.
'There is the need to expedite the approval process since the price of aluminium and other metals is on the decrease on the world market, which has affected the future earnings of investment and its value
'It is of great importance to meet the condition of Parliamentary approval to secure the irrevocable commitment on the part of the consortium', the Report said.
Other benefits the Report noted will be the establishment of an integrated aluminium industry, employment opportunities, refurbishment of Tema-Kumasi Rail Line and the revamping of the local salt industry.