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Business & Finance | Apr 28, 2004

Financial Crisis At Ghana Telecom?

Culled from Reuters

Ghana Telecom gets $130-million loan, shareholder says Malaysian telecommunications company Telekom Malaysia Bhd, locked in a dispute over its investments in Ghana Telecom (GT), said on Tuesday it had approved under protest a $130-million loan to the Ghanaian firm.

The Malaysian company said it had approved the loan to avert a financial crisis at GT. But GT's management said it needed the funds for a major exansion plan, not to tackle trouble.

Telekom Malaysia said its appointees to the board of GT, Ghana's biggest telecoms firm, had backed the syndicated loan arranged by French telecoms equipment maker Alcatel.

It said its Ghanian unit G-Com, which has 30 percent of GT, still insisted that the deal required some minor amendments "as the loan purports to dilute certain rights which G-Com states that it has under GT's regulations".

The company's statement also said that Norway's Telenor, which has been managing GT for over a year, had told the GT board earlier this month that it would face severe financial distress if the board did not approve the loan.

But GT Chief Executive Oystein Bjorge told Reuters in Ghana: "We are not in financial crisis but we need to access these loans in order to carry out a major expansion project." He said the firm aimed to add 400 000 fixed lines and 760 000 new mobile connections over the next two to three years. GT has 290 000 fixed lines and 135 000 mobile connections now.

Telekom Malaysia said last month that the Ghanian government had agreed to pay it $50-million as part of a bigger dispute over investments in the West African country.

Telekom Malaysia has filed an international arbitration claim seeking to force Ghana to buy back the Malaysian firm's share of GT and pay it another $124-million.

Telekom paid $38-million for the stake in 1997.

The claim was filed with the arbitration court in The Hague last October and is expected to be resolved in July.

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