Ghana govt advisers in London for Ashanti talks

By Ben Hirschler

LONDON, Oct 14 (Reuters) - A team of advisers to the Ghana government arrived in London on Thursday to discuss the future of the country's largest company, Ashanti Goldfields Co Ltd.

Industry sources said officials from Ghana's CAL Merchant Bank, Accra stockbroker Databank and London's T. Hoare Canaccord would study the position of the troubled gold miner, subject of an $840 million bid from 32-percent shareholder Lonmin Plc.

The government has a stake of 20 percent and a veto vote in Ashanti, which is currently struggling to keep its head above water in the face of huge paper losses on its gold derivatives hedging book.

``The government and its advisers want to understand the hedging position which is not the easiest thing to get to grips with,'' said one source.

``They want to understand the situation thoroughly and their express desire is to resolve the matter as quickly as possible.''

Ashanti's 17 gold hedge counterparties have agreed a temporary standstill on hundreds of millions of dollars of outstanding obligations which are being rolled forward on a week-by-week basis.

People familiar with the situation said the temporary standstill, which ended formally on October 11, had now been extended until October 18.

The advisers were due to meet first with Ashanti senior management, currently in London for talks with hedging counterparties. They will also hold talks with Ashanti's investment bank, Goldman Sachs, and are then expected to talk to Lonmin.

Lonmin's bid, worth around $7.5 a share, is conditional on the hedging counterparties agreeing a long-term standstill on margin calls they are entitled to from Ashanti.

The bid also needs the support of the Ghanaian government.

Uncertainty about the government's position was fuelled by the sacking this week of Mines and Energy Minister Fred Ohene-Kena.

Ohene-Kena had expressed support for the merger in an interview with the pro-government Daily Graphic newspaper on October 8. But one industry source said this did not mean Accra had decided against Lonmin's proposal, which would create a leading African precious metals producer.

Shares in Ashanti were quoted 50 cents higher at $5 by 1300 GMT in London -- still a hefty discount to the Lonmin offer, reflecting concerns that the merger plan may yet stumble.

Analysts said there would be no shortage of buyers for Ashanti's assets if the Lonmin bid collapsed and the company had to be broken up.

Barrick Gold Corp is likely to be particularly keen on Ashanti's Geita mine in Tanzania which would fit well with its operation at Bulyanhulu, acquired earlier this year with the purchase of Sutton Resources.

AngloGold Ltd, the world's biggest gold producer, is also seen waiting in the wings should a deal with Lonmin unravel.