Minority warns Govt on Ashanti-Anglogold merger

Accra, Oct. 28, GNA - The Minority in Parliament on Tuesday asked Government to be cautious on the intended Ashanti Goldfields Company (AGC) merger with Anglogold or Randgold because the transaction could have major consequences for the nation.
It said reported industry assessment suggested that the value being proposed for acquiring the shares of AGC are under-valued under its current assets and potential for deep mining.
A statement Mr Seidu Paakuna Adamu, Minority Spokesman on Energy, issued in Accra on the proposed AGC merger said Obuasi was touted as having the largest unexploited deep ore potential in the world. "Following its initial offer Anglogold repeatedly emphasised that it was not going to increase its offer price even in the face of the higher price offer by Randgold Resources. Lonmin had already undertaken to back the Anglogold ofer."
The statement said "eventually Anglogold did increase its price from about 1.1 billion dollars to about 1.4 billion dollars, after which Randgold has further increased its offer to 1.7 billion dollars." "It will be recalled that the market capitalisation of AGC at the 20 dollar price during the stock flotation came to 1.68 billion dollars - the deeper levels of the Obuasi Mine were not factored into the value of the mine at the time."
The statement said it was not surprising that in 1999 when Lonmin offered 800 million dollars for a similar "merger" the NDC government refused to oblige in the national interest.
The NDC said following a recovery of AGC from the hedge book crisis after Ghanaians had purchased shares at the Initial Public Offer (IPO) in 1999, investors have not been paid any dividend.
"It would appear that just at the time AGC is recovering its financial health after that near disaster, it is being subjected to a takeover, which reportedly undervalues it."
The Minority said in their view: "It will be simply unacceptable for the control of AGC to be handed over cheaply to anyone. "The Government of Ghana must use its control of the Golden Share to ensure that the national interest is served and that Ghanaian shareholders derive the maximum benefit for their loyal but so far un-rewarded investment in AGC."
It said a Board dominated by Lonmin could not provide the last word on the national interest of Ghana.
The Minority warned that any attempt to stampede the Government of Ghana into a quick decision on the merger offer with claims about level of planned investments at Obuasi must be resisted, especially as there was no firm commitment on the part of the potential partners to undertake those investments.
The statement said the Government was entitled to examine carefully the price offer in respect of the proposed AGC merger and that the six-month period provided under the Minerals and Mining Law, 1986, to the Minister of Mines to review such transactions once formal notice was provided by an incoming controlling shareholder was by no means unreasonable in industry terms.
The Minority expressed regret that in respect of such a major international transaction the Parliament of Ghana had not had the benefit of even a briefing from the Executive.
Parliamentary consideration would provide an opportunity to gain useful consensus in what might be one of the most important financial transactions that the Government would be called upon to enter into. The statement said Government would do well to place all the available information on this proposed transaction before the Parliament so that the representatives of the people were actively involved in the assessment of the various options.