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30.08.2004 Business & Finance

BOPP officially lists on bourse

By GNA

Accra, Aug. 30, GNA - Benso Oil Palm Plantation (BOPP) was officially listed on the Ghana Stock Exchange on Monday to become the first agro-based industry on the bourse.

The listing followed the government's decision to off-load 40 per cent of its shareholding in BOPP through the exchange and the settlement of a dispute between the government and the owners of the land. The public share offer, which was oversubscribed by 173 per cent, enabled the company to raise a total of 69.6 billion cedis through the sale of 13.92 million shares of no par value at 5,000 cedis each. There were a total of 11,350 applicants.

BOPP is listing with an initial market capitalisation of 174 billion cedis.

The listing process was nearly marred because of a writ filed by the Adum Banso Stool, the owners of the land, on the grounds that government did not pay adequate compensation in respect of the land. The Government acquired the land by Executive Instruments in 1976 and 1977. However, the listing was allowed to continue, following an out of court agreement the Government reached with Adum Banso Stool and other interest holders of the acquired land.

In an address read for him Mr Yaw Osafo-Maafo, Minister of Finance and Economic Planning, said the selling of the shareholding was a demonstration of government's openness and transparency in the sale of state assets.

"It is also a realisation of government's commitment to reinforce market forces in the Ghanaian economy through liberalisation, deregulation and privatisation."

Mr Osafo-Maafo said development of the oil palm industry was high on the agenda of government because of its potential to improve the country's balance of payments and create jobs.

There is a market of 240,000 tonnes per annum of crude palm oil in Ghana but only 100,000 tonnes is produced currently.

Mr Osafo-Maafo said this called for solutions to infrastructure development, land related problems and crude agricultural practices, which affected yield, to be able to attract investment to the sector.

Mr Ekow Afedzie, General Manager of the Ghana Stock Exchange, said the government could further enhance the development of the market by divesting viable equity through the market, list the proposed two and three-year government bonds and provide funding to automate trading. He said the success of BOPP's flotation was a clear manifestation of the Stock Exchange as a source of long-term capital mobilisation.

Mr Malik Amin, Managing Director of BOPP, said for Government's dream on Oil Palm to succeed there was the need to open up the rural areas for active investor participation through focusing on infrastructure development, particularly roads and electricity. He asked government to expedite action on the road between Apowa and Mpohor to benefit the surrounding communities.

The company on its first trading recorded a 600 cedi price appreciation to close at 5,600 cedis.

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