African leaders urged to resist pressure to privatise water sector
London (United Kingdom) 27 March 2002 - A restructuring of Ashanti Goldfields' debt helped the London-listed African gold mining company double its profits for the year to December 31. Net earnings before exceptional items soared from Dollars 30.5m to Dollars 62.7m (Pounds 44m), despite a decline in production.
Interest payments fell 43 per cent to Dollars 29.4m, as the effects of refinancing were felt and pre-tax profits came out at Dollars 67.4m (Dollars 130.8m losses after exceptionals). The company's net debt fell from Dollars 292m to Dollars 271m.
Sam Jonah, Ashanti's chief executive, said the company had ended the year on a stronger note. Ashanti secured a Dollars 219m refinancing package enabling it to replace high-coupon debt with lower cost borrowings.
The debts were incurred three years ago when Ashanti badly misjudged the direction of gold prices, finding itself short of the precious metal in its hedge book just before gold rose sharply.
However, Ashanti gave no sign of progress in its efforts to persuade the Ghanaian government to restructure its "golden share" - a factor that has weighed on the company's share price. The golden share gives the government - holder of a 20 per cent stake - power of veto over disposal of assets and leases; it can be exercised in the event of Ashanti's liquidation.
Analysts have warned that the government's boardroom influence acts as a block on a possible deal with another large mining company, such as Gold Fields of South Africa or AngloGold, and depresses the share price.
The company has attempted to play down the power of the golden share and Mr
Jonah has argued that the government would be unlikely to exercise its rights. But the government is reluctant to give up the golden share.
It regards its power over Ashanti, and its local Obuasi mine, as being of national strategic importance. Pressure is building from the company's financiers and shareholders, which include platinum-orientated Lonmin, to bring in a new partner.
Ashanti achieved its better earnings performance despite falling production and rising costs. Gold production totalled 1.66m ounces, against 1.74m ounces in the previous year. The fall in production reflected the closure of surface mining at Obuasi and lower output at Siguiri in Guinea and Bibiani in Ghana. - - By James Lamont, Financial Times
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Accra (Greater Accra) 27 March 2002 - The Ghana National Coalition Against the
Privatisation of Water, on Wednesday called on African leaders to be mindful of the importance of water in national development and resist external pressures to privatise the sector.
A statement in Accra signed by Mr Patrick Apoya, Northern Sector Co-ordinator of the coalition, expressed regret that water as an essential commodity was going to be limited to only those who could afford it.
''It is against this backdrop that the availability of water must not be subjected to corporate board room decisions and the profit and loss accounts speculations of selfish business interests."
The call was made as part of activities marking this year's World Water Day, which fell on March 22. The statement said; "the water sector must remain within the domains of public management and control," adding that African leaders must ensure universal access to water regardless of social or economic status.
They must also impress upon the International Monetary Fund (IMF), the World Bank and other international donors, the need to stick to this approach as a viable development agenda".
It appealed to civil society to join in the global fight to discourage any decision by policy makers to concede to interest driven donors to privatise water and commended all solidarity groups around the world for their unflinching support to back the fight for affordable, clean, quality and accessible water to help promote the health and well being of the majority of the people.
GRi../
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