African Champion announces measures to restructure operations

Accra, Sept. 23, GNA - African Champion Industries (ACI), producer of Rose Tissue paper, is to implement four measures it hopes will restructure its operations to become a viable venture.

They include to raise up to GH¢4.0 million through issuance of new shares, expand capacity of tissue operation to GH¢1.0 million and hire a world-class Board Chairman.

Mr Elkin Pianim, Executive Chairman of ACI, announced this when he presented the outlook of the company at the "Facts Behind the Figures" series of the Ghana Stock Exchange (GSE) in Accra on Wednesday.

He said the implementation would, among other things, see the ACI explore alternative investment markets by listing on the London Stock Exchange by next year to raise enough capital to strengthen its balance sheet and increase investor group exposure.

Mr Pianim said the company would also in the next 90 days begin a rights issue process at the GSE and to reduce its share price to GHp25 per share to make it attractive to investors.

He said these measures had become necessary because the company was currently unprofitable and could not meet its operational costs.

ACI, which controls 20 per cent of market share in the tissue industry, has a market capitalization of GH¢2.6 million with annual turnover of GH¢3.7 million, a situation Mr Pianim described as "chronically loss-making and cannot make profit."

Its gross operating profit for the first half of 2010 stood at GH¢418,614 as against administrative cost of GH¢518,713.

Mr Pianim said the company would also be employing efficient technology, diversify operations, explore promising sectors and retrench staff from the current 270 to 150 to boost its financial position.

He said he was hopeful that a $7 million deal, in the form of royalties it had with Adamus Resources Limited, a gold mining company which would start materializing from 2013, would be a good source of funding for its operations.

Mr Pianim said the tissue industry was viable and expressed the hope that the successful implementation of its restructuring measures would enable the company to regain its position on the market.

Mr Ekow Afedzie, Deputy Managing Director of the GSE, called on companies to take advantage of the country's conducive business environment and raise resources to expand their businesses.

ACI, formerly Super Paper Products Company (SPPC), was incorporated in 1967 and listed on the GSE in 1992.

It was acquired in 2008 by an investor group led by Serengeti Capital, which took control of management and renamed it ACI in 2009.

GNA