The government is looking for investors to help resuscitate the Prairie Volta Limited (PVL), a public/private partnership in which it holds 30 per cent shares, the Deputy Minister of Food and Agriculture (MOFA) in charge of Crops, Dr Ahmed Yakubu Alhassan, has said.
Dr Alhassan, who was reacting to stories published by radioxyzonline on the state of the company, said “the ministry or the government is not asleep on the issue of the PVL but in the case of this nature of partnership between the government and a private entity, you can’t just barge in and start dismembering the company or reassembling it, else you can even be accused of a vested interest because another company is coming”.
He said it took a long time to get the PVL management to accept that the company needed to be rescued, adding that it was in the latter part of August 2016 that the PVL gave an indication that it was ready to open up for participation.
“They themselves were even beginning to also shop for partners so that they could make sure the company is operational,” he explained.
Dr Alhassan said it was after the government had realised there was an understanding that it decided to develop a road map towards looking for investors.
Disposing of govt shares
He explained that shares of the state in the company could not be disposed of without the government’s approval, adding that MoFA and the Ministry of Finance must jointly put the matter before the Cabinet to initiate the process, adding that a memo to that effect was yet to go to the Minister of Food and Agriculture.
“Once the minister satisfies himself that this is the right way to go, we will then go to the Cabinet for approval. Then we get the board to sit and agree to the road map and we can get the general meeting to agree that we need an injection of fresh ideas in management,” he said.
Dr Alhassan stated that once the GCB Bank and the government that held 30 per cent each agreed on a common vision, “we become majority shareholders in the company and then we can begin calling the shots”.
He said the government also needed to bypass another condition in the Companies Law, which states that “if one shareholder wants to dispose of its shares, the rest of the shareholders have the first right to buy those shares”.
“So our legal team advised us that if the government wants to dispose of the 30 per cent shares and the GCB Bank also wants to dispose of its shares, the PVL has the right to also buy the shares,” he stated.
However, he was of the view that if the PVL found it difficult to manage its 40 per cent shares, it would be unlikely to manage the other shares of the company.
Govt investment in PVL
Responding to the question as to why the government had not gone to the PVL’s rescue in the face of the company’s daunting challenges, he said: “It is because of the government’s inability to take public funds and put them in the PVL.”
“We cannot give the PVL grants again because the government has been very generous even with the loan facility that the company has received from the government directly and other government institutions, notably the Agricultural Development Bank, the GCB Bank and the Out-growers Value Chain Fund (OVCF), which is also a project in the Ministry of Food and Agriculture,” he said.
Dr Alhassan stressed that the government had done everything in its power to ensure that the company was sustained and operated profitably but because that had not happened, there was the need to look outside for a strategic investor.