Business News of Thursday, 2 December 1999
Accra (Greater Accra), 2nd December 99 Ghana's largest cocoa buying agent, the state-owned Produce Buying Company (PBC), on Wednesday began the flotation of 384 million shares to the general public with Mr. Kwame Peprah, Minister of Finance describing it as "ground breaking."
The PBC flotation at 500 cedis a share, ends on 14th January 2000 and makes it the first cocoa company to be listed on the Ghana Stock Exchange (GSE) and brings to 13 the total number of State-Owned Enterprises listed on the Stock Exchange, representing 6 per cent of the total number of 217 companies sold by the govt via the privatisation route.
Mr. Peprah who launched the flotation said the government would hold 20 per cent of the shares, while workers of PBC will hold five per cent and farmers holding 20 per cent.
The Social Security and National Insurance Trust (SSNIT) has indicated its intention to participate strongly in the PBC offer.
Mr. Peprah said the flotation is in line with the government's policy of revitalising the economy and the private sector and hoped that many more local buying companies (LBCs) will follow suit.
The success of the flotation of PBC on the Exchange will help to determine the privatisation of other State-Owned Enterprises (SOEs) through the Stock Exchange. Mr. Francis Tweneboa, General Manager of the GSE, urged the government to use the stock market as a vehicle for its privatisation drive.
He dismissed doubts expressed in certain circles about the capacity of Ghana's capital market to absorb all shares of divested companies adding that there is a huge potential for it to expand.
"A positive indication is the magnitude of money, which floats in our cash economy," he said and pointed out that last June, about 947 billion cedis was in circulation outside the banking sector as against 54 billion cedis in the vaults of the banks.
Public deposits in the banks amounted to 2,328 billion cedis, Mr. Tweneboa said adding that the GSE is open to foreign investor participation and cited the successful flotation of Ashanti Goldfields Company's in 1994 as an example.
Mr. John H. Newman, Chief Executive of Ghana Cocobod, said PBC is ripe to get on the GSE and urged the workers to buy up shares since he was confident that they benefit from the flotation.
Dr James Longdon, Board Chairman of the PBC, said the company would explore other avenues to maintain the leading role of PBC and a cordial relationship with farmers.