Minority shareholders of the Produce Buying Company (PBC) have petitioned the government to recapitalise the company to enable it to lessen its dependence on loans from banks.

The group claimed that the company, which was operating without seed money from the government, depended on loans and overdrafts which attracted high interest rates.

“We have not had any dividend for years because the PBC does not have seed money as capital to purchase cocoa. It depends on banks which charge exorbitant interest rates,” the group further claimed.

Loans affecting investment 

The group presented the petition at the annual general meeting of the PBC held in Accra yesterday.

Presenting the petition, a member of the minority shareholders, Mr Sampson Ashong, said the company’s dependence on loans was nagatively affecting its operations.

The government, through the Ministry of Finance and the Social Security and National Insurance Trust (SSNIT), has more than 75 per cent stake in the company, while the remaining is for shareholders who were  in the minority.

Mr Ashong, who is also the General Secretary of the Shareholders Association, said the petition would be sent to SSNIT and the Ministry of Finance.

He said because of that development, the company could not pay dividends for the 2013/2014 and 2014/2015 financial years.

Net profit 

Presenting the company’s operational report for the 2014/2015 financial year, the Chief Executive Officer of the PBC, Mr Maxwell Kojo Atta-Krah, said management of the company was still in talks with the government to allow it to raise equity capital through a rights issue or private placement.

He said the proposal, which had been on the drawing board for years, would be pursued until an agreement between the company and major shareholders (the government) was reached.

Concerning the company’s performance in the year under review, Mr Atta-Krah said the company recorded a net profit of GH6.27 million compared to a net loss of GH¢25.31 million in the previous year.

He cited the unfavourable weather conditions, the company’s continued reliance on borrowings from the market to supplement funds for cocoa purchases and the general unfavourable economic situation, as some of the factors that had contributed to the poor performance.

With a decrease of 17.5 per cent in national cocoa purchases from 896,917 tonnes in the 2013/14 to 740,254 tonnes in the 2014/15 crop year, he said the company’s purchases similarly decreased by 21.5 per cent from 294,261 tonnes in 2013/2014 to 230,989 tonnes in 2014/15.

Mr Atta-Krah told the shareholders that management and the board were committed to putting in place strategies to improve the company’s operational capacity and efficiency so as to increase its market share.

The Board Chairman of the company, Captain Kwadjo Adunkwa Butah (retd), announced that the company could not recommend the payment of any dividend due to a negative income surplus account.

Regarding the operational results of the PBC, he said financial cost continued to take a heavy toll on the company’s finances, as it increased by 38 per cent from GH¢61,359 million the previous year to GH¢85,135 million in the year under review.

Source: graphiconline