DJ Ghana's Ashanti Meets Lenders, Govt To Forge Consensus
ACCRA, Ghana (Dow Jones)--Ghana's Ashanti Goldfields Company Ltd. (ASL) is in negotiations with the government, creditor banks and a group of minority shareholders in Accra Tuesday, in an attempt to resolve dissension within the company, sources familiar with the affair have said.
The talks come in the wake of a court case victory by a group of minority shareholders against Ashanti, giving them the right to hold an Extraordinary General Meeting. They plan to vote in a new board of directors at the EGM and have the declared support of the Ghanaian government. The government of Ghana holds a 20% stake in Ashanti.
A negotiated arrangement between the two sides, however, could lead to the cancellation of the EGM.
A deal between the minority shareholders and the government on the one hand, and Ashanti executives on the other, is expected by the end of the day, said a well-placed source. The deal, he said, would involve the removal of a small number of board members within days and the removal of most other directors at an annual general meeting to be held April 26.
Ashanti, said a source, is pushing for the appointment as directors of Chester Crocker, the former U.S. Assistant Secretary of State for African Affairs under President Reagan, and Frank Savage, a U.S. banker. He also said that the company has the agreement of the government and the minority shareholders that Chief Executive Sam Jonah and Chief Operating Officer Trevor Schultz will remain in their posts. Creditor banks are also looking to have one of their representatives on the board.
"The board will be completely different. Only about five people from the old board will stay," one source said Monday evening. Another key source said the creditor banks had agreed with the minority shareholders that Ashanti "needs a strong, independent board".
Dow Jones Newswires has been told the five creditor banks at the talks are: Barclays Capital, Chase Manhattan Bank, C.S. First Boston, Goldman Sachs and Credit Suisse Financial Products.
Government representatives have been assuring the five creditor banks that a nationalization of Ashanti is not on the cards, said a source. He said the banks became concerned about this following a report in the U.K.'s Sunday Telegraph last week, which referred to "the threat of the nationalization of its (i.e. Ashanti's) Ghanaian assets".
Face-to-face talks took place Monday, involving Ashanti, creditor banks, the minority shareholders and the government, a source said. He said the meeting was coordinated by the vice-president of Ghana, John Atta Mills.
Now, however, the two broad camps in the negotiations are apparently communicating indirectly, with the creditor banks acting as middlemen.
An official announcement on the outcome of the negotiations is expected by end Wednesday.