Business News of Friday, 7 April 2006
Source: Palaver
Accra, April 6, Palaver -- The Social Security and National Insurance Trust (SSNIT) has confirmed Ghana Palaver?s worst fears that the Government of Ghana (GOG) is gradually ?capitalising? the GIA-USA PLB, the so-called American partners in the Ghana International Airlines (GIA) out of what is turning out to be a very risky venture and assuming all the risks of an Airline that seems bound to fail.
It seems only a matter of time that GIA will become 100% GOG-owned, ?back-to-bataan?, a la Ghana Airways.
In a response to written questionnaire administered to it by Ghana Palaver and signed by its Head of Public Affairs, Mr. K. Osei Bimpong, SSNIT has confirmed that in December 2004, the Trust approved on commercial terms a loan amount of the cedi equivalent of US$5 million in favour of the GOG to enable the Government pay for its equity share in GIA. At that time, the share structure of GIA was 70% (GOG) : 30% (GIA-USA PLB).
In September 2005, the SSNIT Board approved a further loan of the cedi equivalent of US$15 million for the GOG. According to SSNIT, US$4 million of that amount has been disbursed, and it was for the acquisition of additional equity (shares) in GIA
This means that the Minister of Presidential Affairs and Chief of Staff lied to Parliament when he told the Finance Committee in March 2006 that only $5 million had been secured and certified from SSNIT loan.
Therefore, unless GIA-USA PLB matched this additional share acquisition by the GOG, and the Parliamentary Committee Report does not say the American partners have, then the shareholding of GIA-USA PLB in GIA has been diluted by that amount.
Mathematically, it works out like this:
Original Shareholding Structure:
GOG: US$4,900,000.00 or 70%
GIA-USA PLB: US$2,100,000.00 or 30%
Add GOG Additional Acquisition:
GOG: US$4,900,000.00 + US$4,000,000.00 = US$8,900,000.00 or 80.9%
GIA-USA PLB: US$2,100,000.00 or 19.1%
What we expect to see therefore is that in the records of the Registrar General, the shareholding structure of GIA has been amended to reflect this new reality. Did the Parliamentary Committee satisfy itself that this has been done?
The SSNIT letter does not state what the approved but undisbursed US$11,000,000.00 (US$15,000,000.00 ? US$4,000,000.00) represents ? whether it is also for additional equity acquisition or it is a loan.
On the assumption that it is additional equity (as the SSNIT letter actually implies), and GIA-USA PLB has not matched it with further share acquisitions, then the shareholding structure changes even further as follows:
Add GOG US$11 million Share Acquisition
GOG: US$8,900,000.00 + US$11,000,000.00 = US$19,900,000.00 or 90.4%
GIA-USA PLB: US$2,100,000.00 = US$2,100,000.00 or 9.55%