The government is negotiating with Telekom Malaysia to buy its 30 per cent stake in Ghana Telecommunications Company (GhanaTelecom)and float it to the public.
A source at the Ministry of Communications, which disclosed this in an interview,said the value of the shares,which was acquired for $30 million by Telekom Malaysia in the late 1990s,had been over-valued,hence the negotiation to bring the price to an appreciable level.
“The government is waiting to buy back the 30 per cent share that Telekom Malaysia,the minority shareholder, currently controls in the company and publicly float it on the Ghana Stock Exchange (GSE) to the Ghanaian public,” it said.It said the government would raise more money through the sale of the shares to finance part of the expansion project of the company.
The source said considering the successful sale of shares by two institutions on the GSE in the last six months of 2004, there was no doubt that the money expected from the intended sale could be easily raised.Last year,the shares floated by the Benso Oil Palm Plantation (BOPP) on the GSE was over-subscribed by more than 170 per cent,while those of CAL Bank were also over-subscribed by over 300 per cent,a situation which forced the bank to return about ¢234 billion it mopped through the floatation back into the economy.
The source said “considering these achievements, there is no doubt that GhanaTelecom's shares will also perform”. On the international arbitration between the government and the minority shareholder,the source said that the matter has been amicably resolved.
Following the abrogation of the management contract between the government and Telekom Malaysia about three years ago and the review of the board structure of the company during the same period, the minority shareholder became aggrieved and resorted to international arbitration to resolve the difference.
Earlier,Telekom Malaysia,through the courts,managed to get an injunction placed on a $150 million loan from the Chinese government and a syndicated loan of $60 million from banks in the country to speed up the expansion programme of the company.
This delayed the programme of GhanaTelecom for almost a year,thereby affecting the targets set for it by the government under the new management headed by experts in the sector from Telenol of Norway.
Some of the targets included the provision of an additional 750,000 mobile phone lines and 450,000 fixed phone lines to make easy the connection of at least one model senior secondary to the Internet.When he took his turn at the vetting session last week as the President's nominee for the position of Minister of Communications, Mr Albert Kan-Dapaah justified why the management contract and the reversal of the composition of the board.
He said the government, being the majority shareholder of the company, needed to have a majority seat on the board to reflect its shareholding structure.Mr Kan-Dapaah also made it clear that under the terms of the contract, the government had the right to renew or abrogate it when it expired and, therefore,the decision taken was purely based on the terms of the contract.
Analysts believe that the decision of the government to float the shares is a good idea and must be encouraged. Dr Peter Quartey,a research fellow at the Institute of Statistical,Social and Economic Research (ISSER) of the University of Ghana, Legon, said “It is a pretty good idea that must be encouraged,instead of privatising state institutions”.
He said the performance of the shares of most companies on the GSE was an indication that the government would be able to raise the money it expected from the sale.