PBC defers GH¢200m rights issue to seek govt approval

BY: Enoch Darfah Frimpong

Dr Abu said the minister told them that he had to seek approval from the Cabinet and that they were still waiting.

 As a result, the company's directors deferred a resolution initially meant to seek shareholders approval to raise the GH¢200 million.

But once the government gives the green light, Mr Abu said, the company would call an extra-ordinary general meeting to seek shareholders’ approval on the rights issue.

Proceeds from the rights isssue was expected to help improve PBC’s working capital to enable it to lessen its dependence on loans and overdrafts from banks.

About 30 per cent to 40 per cent of PBC’s operating profits go into debt financing, according to the company’s 2012 financial results, and its board of directors and management are now fighting to cushion it from the shocks through higher liquidity.

The shareholders, however, voted to give the board the approval to consolidate the company’s shares on the GSE.

The Managing Director of PBC, Mr Maxwell Kojo Atta-Krah, said at the meeting that the consolidation was in line with the company’s intention to raise additional funds from the market.

He explained that due to the high number of issued shares from the company, a little change in its share price often led to heavy shocks on its share value.

“That makes our shares very unattractive to seasoned investors.”

The consolidation will convert every 10 shares of the company to one. That will consequently lower PBC’s total shares on the stock exchange from the current 480 million to 48 million shares.

Although the total shares of the company would, as a result, be far less than GSE's requirement of a minimum of 100 million shares per every listed company, the MD said that should not be an issue given that PBC already had plans to raise more funds on the GSE.