Minority shareholders and the Board of the Produce Buying Company Limited (PBC), have renewed calls for a recapitalization of the company.
This follows PBC’s admission that the continuous reliance on bank loans is taking a toll on the company’s finances.
“The company’s overreliance on borrowings from the market to supplement funds for purchases still presents it with a cost outlay too heavy to bear,” PBC’s CEO, Maxwell Kojo Atta-Krah said.
He believes the fortunes of the company will turn around if the major shareholders; SSNIT and government of Ghana allow a recapitalization.
“We are seeking permission from the major shareholders to allow us; with the approval of the minority shareholders as well, to get to the market to raise some equities for the market. We are seeking to go in for a rights issue where every existing shareholder will have the rights to buy and contribute in terms of equity according to whatever shares he or she is holding,” he remarked.
In 2014, PBC paid a total of 85 million cedis in interests on loans from the COCOBOD and some commercial banks.
Of the amount, the company paid 35 million cedis to COCOBOD as interest while the remaining 50 million cedis went to some commercial banks it had secured loan or credit to fund its operations.
Even though the company made over 6 million cedis in profits, it spent over fifty percent of its total revenue [GH¢1,470,972,519] to finance loans.
Meanwhile Mr. Atta-Krah tells Citi Business News he is optimistic the discussions would be finalized by the end of the year.
“The major shareholders have been looking at the implication and the modalities that will have to be put in place,”
“I am sure that by the end of the year we should have a positive feedback from them,” he further observed.
The major shareholders; SSNIT and government of Ghana, are jointly controlling about 75 percent of the shares in the company.
Source: citibusinessnews