Aluworks to raise 30 million Ghana Cedis in rights offer

Accra, March 15, GNA - Aluworks Limited, manufacturers of cold-roll= ed aluminum products, is to raise GH¢30 million ($20 million) in a rights issue to be utilised partly to complete a planned capital expansion and to prov= ide working capital to support increased level of business. The company will use $10 million to acquire and install a second co= ld mill to boost capacity from the current level of 30,000 tonnes to 50,000 tonnes, to meet both local and export demand.

Aluworks expects the second cold mill to be in place by the end of 2011 while current cold mill is retired for refurbishment in 2012 The remaining $10 million will be used as working capital to implem= ent the company's strategy for raw materials.

"The right issue would address the high interest cost the company currently pays to the banks and strengthen the company's capacity to adequately meet demand for flat rolled aluminum products in the region," Mr. Ernest Kwasi Okoh, Managing Director of the Company, said that after the launch of the offer, which runs from March 15 to April 9, 2010. Current shareholders are allowed nine shares for every five existing=

shares at a discount of nearly 10 per cent of the market price. "A lot of our export already goes into Nigeria and we expect that to grow tremendously over the next few years," Board Chairman of the Company= , Mr. William Inkumsah said.

He said funds from the offer would also help deal with the disruptio= n in supply of aluminum ingots from the traditional local supplier, Volta Aluminum Company (VALCO), which has led to a 33 per cent increase in importing costs after frequent interruption in power supply affected production. Mr. Inkumsah urged shareholders to take advantage of the offer to increase production as demand for aluminum was growing strongly after the=

global credit crunch.

The company now source raw material from UC Rusal Marketing GMBH, wh= ose supplies come from either Alscon in Nigeria or St. Petersburg in Russia; BHP Billiton Marketing AG, whose supplies come from South Africa, and Bharat Aluminum Co. Ltd. of India. 15 March 10