Business News of 2014-01-14

Gov’t to acquire SSNIT’s stake in STC

Government wants to fully take over Intercity STC Coaches Limited, and it is preparing to acquire the 80 percent stake of the Social Security and National Insurance Trust (SSNIT) in the troubled transport company.

The plan is meant to ensure that government, the minority shareholder, retains control of STC after SSNIT put up its stake for sale. The transport company, according to Twumasi Ankrah Selby, Chief Director of the Ministry of Transport, continues to be seen as a strategic and socially important state enterprise.

The plan to buy the stake is being considered by Cabinet, he said, and will be followed by the search for a private partner to help government run STC. “SSNIT has indicated that it wants to sell its stake in the company.

Government, which has the first option to buy, has decided to acquire SSNIT's 80 percent stake. It will then look for an investor to partner it in running the company,” Mr. Selby told the B&FT in an exclusive interview.

In November, government facilitated the acquisition of 20 new buses from Swedish automobile company Scania Group for STC as part of plans to restructure and resource the company and run it profitably in partnership with the private sector.

“The process is on¬going and we will see results this year,” Mr. Selby said. Several investors have expressed interest in acquiring the beleaguered transport company, or partnering government to operate it.

Three companies – Suvini, Tannik Group and JA Plant Pool - expressed initial interest in acquiring SSNIT's stake, and Metro Mass Transit Limited (MMT) sees the possibility of owning STC as part of its five-year strategic plan for the period 2014-2019.

While its domestic operations continue to suffer, STC relies heavily on its cross-country trips from Accra to Abidjan, Lome and Cotonou for the bulk of its revenue.

The cash-strapped company earns between GHC t300,000 and GHC 400,000 from inter-country trips every month.

Source: B&FT
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