Government to issue Ȼ1.5b bond Thursday
Ghana’s debt will escalate further on Thursday, October 22, 2015 because the Bank of Ghana (BoG) on behalf of government will issue a three-year fixed rate bond to the tune of Ȼ1.5 billion.
The instrument which is opened to both local and overseas investors will be issued at par.
Information posted on the website of BoG said the bond would be redeemed by the issuer on October 25, 2018.
According to the Central Bank, the instrument will bear a coupon rate equal to the highest competitive bid accepted at the auction for the security.
The coupon rate will subsequently be carried out throughout the term of the security.
The minimum bid however will be Ȼ50,000 and multiples of Ȼ1,000 thereafter.
The Finder gathered that the issuance of the debt instrument has become necessary because of the government’s financial situation whilst some of the funds raised would be used to settle maturing debts and fund some capital projects.
Already, the International Monetary Fund has predicted that Ghana’s public debt stock will hit 72 percent of GDP, about Ȼ83 billion by December 31, 2015.
Government’s borrowing spree also continued on the domestic market as it borrowed Ȼ125.2 million in treasury notes alone from the domestic bond market between July 6 and September 14, 2015.
Government given February 2016 to pay off N-Gas debt
N-Gas, the main supplier of gas to Ghana’s Volta River Authority (VRA) through the West African Gas Pipeline (WAGP), has given VRA up to ending of February 2016 to clear its outstanding debt of $171.5 million.
Last Friday, VRA paid $9.5 million out of the $ 181 million debt for gas supplied from August 2014 to this month.
This means the balance to be paid is $171.5 million.
Sources close to the team that met N-Gas officials last week to negotiate the payment terms told The Finder that the $171.5 million is to be paid in three tranches from now to ending of February 2016.
The sources, however, declined to give the breakdown of the payment dates and how much is to be paid for each tranche.
The debt covers gas supplied to VRA and the cost of supply and transportation of the gas from Nigeria to Ghana.
Intravenous Infusions offers shares to raise GH¢12.3m
Intravenous Infusions Limited (IIL), an indigenous manufacturer of pharmaceutical products, has floated shares on the Ghana Alternative Market (GAX) of the Ghana Stock Exchange (GSE) to raise GH¢ 12.3 million fresh capital to expand operations.
When successful, the company will also shore up its capital base and use part to retire debts which have for some time squeezed the company’s financial flexibility.
Between October 14 and November 25 this year, the company will seek to issue 153 million ordinary shares valued at GH¢ 0.08 per share in an initial public offer (IPO), which will represent 45 per cent ownership of the entity.
This means the 132 million shares, representing 100 per cent ownership by existing shareholders will be diluted to 55 per cent.
According to the Managing Director of Intravenous Infusions, Mr Richard Okrah, the listing had become necessary in order to achieve the future plans the company had outlined for expansion to meet growing demand in the West Africa sub-region.
He was optimistic the company would be able to raise the intended capital, which he said, would partly be used to increase the working capital, reduce outstanding debt and to complete the construction of a new production line.
“Investing in Intravenous will help the company not only to save lives but to better meet the high demand for intravenous fluids in Ghana and surrounding countries and also drive export income to help improve our national economy as a whole,” he said.
Dubai Chamber records 100% growth in non-oil trade with Ghana
The Dubai Chamber of Commerce and Industry (DCCI) has over 12,000 African companies registered with it and operating in Dubai.
Its non-oil trade with Africa grew from United Arab Emirates Dirham (AED) 84.4 billion in 2011 to AED 118 billion in 2014, registering about 40 per cent growth.
The Dubai Chamber is one of the few chambers in the world with representative offices in foreign markets.
The President and Chief Executive Officer of DCCI, Mr Hamad Buamim, who disclosed this said the Dubai Chamber had two offices in Africa, namely Ghana and Ethiopia and was aiming at opening two new chambers by the end of the first quarter of 2016 in Mozambique and Kenya.
He said the chamber was also studying the possibility of opening more offices in Uganda and Angola.
He was addressing 12 journalists from Ghana, Nigeria, Kenya, Egypt, South Africa and Uganda during their visit to the chamber in Dubai to familiarise themselves with operations there.
The journalists, who were invited by the Dubai Chamber, had the opportunity to observe a session of the chamber as well as the chamber’s one-stop-shop approach to transacting business.
Fitch rates Ghana’s partially guaranteed notes ‘BB-‘
Fitch Ratings has assigned Ghana’s USD1bn partially guaranteed notes a final ‘BB-‘ rating.
The bonds benefit from a partial credit guarantee (PCG) provided by the International Development Association (IDA) for scheduled debt service payments of up to 40% of the original principal.
While the IDA PCG can be used to cover debt service payments, reducing the bonds’ potential for default, Fitch believes the primary benefit of the guarantee is to increase the possible recovery in the event of issuer default.
Fitch believes the PCG-protected issue will have a higher likelihood of recovery than other unsecured bonds of Ghana. Consequently, we conducted the analysis using our Criteria for Evaluating Third-Party Partial Credit Guarantees, which focus on potential recovery levels.
Ghana begins building 3rd FPSO
Ghana has begun building its third Floating Production Storage and Offloading (FPSO) vessel as part of moves to make the country an oil hub in West Africa. This comes after the country completed the OCTIP Sankofa gas project negotiations at a cost of 7 billion dollars endorsed by World Bank and the IFC.
The FPSO construction which is expected to be completed and delivered by the last quarter of 2016 is expected to produce some 45,000 barrels of crude oil daily by 2017 and some 170 million cubic feet of gas daily by 2018.
Eni and Vitol are the operators of the Sankofa fields, while the Ghana National Petroleum Corporation (GNPC) is partnering them on behalf of Ghana.
The Minister of Petroleum Emmanuel Armah Kofi Buah said the upstream petroleum sector is now a major contributor to the Gross Domestic Product (GDP)becoming second to the mining sector.
SOurce: Joy Online, Citi Online, Graphic