Goil goes public: IPO to raise more than GH¢17m for operation

Ghana Oil Company Limited is going public to raise more than GH¢17 million to fund its operations.

The company's first-ever Initial Public Offer would put on the market an unrestricted open cash share offer which will put up a total offer of 89,115,187 ordinary shares.

A share which is expected to value at 20 Ghana pesewas or ¢2,000 would last till October 5, 2007. Prospective institutional and individual investors are required to subscribe a minimum number of 300 ordinary shares, amounting to GH¢60 (¢600,000).

The decision to list GOIL on the Ghana Stock Exchange is in line with government's policy of reducing its involvement in the running of commercial entities and releasing sate-owned enterprises from its control.

The company is also expected to use ¢50 billion (GH¢50 million) out of the proceed from the IPO for the construction of new filling stations, rehabilitation of old stations, expansion of storage Depots and diversify into other related businesses.

"This capital re-enforcement is expected to be translated into higher profits and dividends," Acting Board Chairman of GOIL, Freddie Blay, has said. The oil company said it ahs set a minimum of GH¢9.26 million, (¢92.59 billion) to be realised from the offer, adding that, "If the amount is not obtained, all monies paid for the shares under the offer would be returned within eight days after the offer closes on October 12, 2007."

The government which is the wholly owned shareholder for the company for now will maintain 51 percent stake of the company, offering the remaining 49 percent to the public.

Management of GOIL also pledged to offer five percent of the company’s shares to its employees who have worked for the company for a minimum of one year.

GOIL’s turnover growth has been solid over the past five years, growing from ¢571 billion in 2002 to ¢1.9 trillion in 2006. Despite a 112 percent growth in operating costs, the management was able to deliver a whopping bottom line growth of 1,396 percent over the corresponding period.

GOIL enjoys an average market share of 18.1 percent and is considered as the market leader in the retail business among the over 40 registered oil marketing companies in the country.

The company currently has a large retail network, comprising of 85 filling stations, 61 service stations and 138 consumer outlets spread across the country.

Out of the filling and service station, 81 are owned by GOIL, while 65 are joint venture stations. Launching the IPO in Accra yesterday, the Finance and Economic Planning Minister, Kwadwo Baah-Wiredu, assured that in the process of oversubscription, Government would sell additional shares tot eh public.

The Statesman : Business : Goil goes public: IPO to raise more than GH¢17m for operation