GOIL to raise GHC155m in renounceable rights issue

Ghana Oil Company Limited (GOIL) the nation’s foremost indigenous oil marketing company has rolled out a financial strategy to raise GHC155 million through a renounceable rights issue.

As a result GOIL would issue 13,639,640 shares of no par value, and at a price of GHC1.24 per share and in a ratio of 0.5536 new shares for one held by a qualified shareholder.

Mr Patrick Kwame Akpe Akorli, the GOIL Managing Director, who announced this at an engagement dubbed: “2016 GOIL Renounceable Rights Issues and Shareholders Forum,” said rights issue would begin on May 3 and end on May 18, 2016.

According to Investopedia, a renounceable right is an offer issued by a corporation to shareholders to purchase more shares of the corporation's stock (usually at a discount). Renounceable rights have a value and can be traded.

He said the price of GHC1.24 is a discount of 15 per cent on the closing price of GHC1.46 per share as at March 21, 2016, which is the last predictable date before the printing of the offering circular.

He said proceeds from the offer would be used to strengthen GOIL’s balance sheet, expand its current retail outlets, acquire a lubricant blending plant, and expand facilities at the Takoradi Harbour, among others.

Mr. Akorli said all the necessary approvals had been received from the Securities and Exchange Commission and the Ghana Stock Exchange.

He said the offer had been fully underwritten by Belstar Capital Limited under the bought deal model.

He explained that the forum provided a platform to keep investors up to date on GOIL’s share price performance, investor news and the Company's financial communications.

The GOIL MD noted that the need for periodic engagement with shareholders on strategic investment moves to maintain its head posture in the downstream oil sector in the country.

He said the forum also served as a part of good corporate and investor relations practice as GOIL strove to keep its shareholders and the investment community up-to-date on the performance of the Company.

Mr. Patrick Kingsley Nyinah, an investment banker, who schooled the shareholders on the Rights Issue, said GOIL had been adjudged as the largest Oil Marketing Company in the country.

He said GOIL had also been adjudged as one of the best-performing equities on the Ghana Stock Exchange (GES), stressing that its share price had appreciated over 400 percent since 2011.

Mr. Nyinah also said that GOIL, in 2015, was again adjudged the best marketing company on the GES trading with a return of 33.33 per cent.

By a shareholders’ resolution passed on August 1, 2007, the company adopted new regulations and was converted into a public company.

The Government of Ghana in 1974 acquired the shares of AGIP SPA and Hydrocarbons International Holdings in AGIP Ghana Company Limited.
By a special resolution in 1976 name was changed to Ghana Oil Company Limited.
Between the year 2010 and 2012, the Company underwent a transformation process aimed at changing its logo, station outlook, and most importantly the corporate culture, which was dubbed “Good Energy comes with a Smile”.

The launch of the New GOIL took place on May 18, 2012. Though the Company's main business is marketing and distribution of petroleum products in Ghana, one of the tenets of the New GOIL is to move beyond the current frontiers to marketing and distribution of energy products, in general.

GOIL has the largest retail network across the country. The company also has numerous consumer outlets throughout Ghana.

The consumer outlets include companies, schools, hospitals, factories, hotels, banks and major parastatals.

In addition, there are a number of other retail outlets established to market premix fuel and kerosene to rural areas. LP Gas filling plants have also been installed at some of the filling and service stations and at other locations in the country.