Ghana’s Ashanti Goldfields Company limited has entered into an interim margin free arrangement with its counter parties. The agreement signed with all of its bankers, will require all active counter parties to enter a new margin free trading letter, which will amend and restate the existing margin free trading letter once every condition of the interim agreement have been satisfied. The margin free agreement means that irrespective of the change in Gold price on the world market, AGC will not be required to pay the difference as it did during the hedging crisis in the year 2000.
Ghana’s Ashanti Goldfields Company limited has entered into an interim margin free arrangement with its counter parties. The agreement signed with all of its bankers, will require all active counter parties to enter a new margin free trading letter, which will amend and restate the existing margin free trading letter once every condition of the interim agreement have been satisfied. The margin free agreement means that irrespective of the change in Gold price on the world market, AGC will not be required to pay the difference as it did during the hedging crisis in the year 2000. Analysts say this arrangement will help the company in its financial restructuring exercise after its hedging problems in 2000. Management also sees the move as a significant step towards eliminating the risk of margin calls in relation to its hedging arrangements especially now that some of their mines are under performing.
