The Social Security and National Insurance Trust (SSNIT) is ready to offload its 80% stake in the ailing Intercity STC Coaches Limited (STC).
“We have held some discussions with SSNIT, and as it stands now they are not interested in the company anymore; they want to sell,” a senior official of the transport company said in an exclusive interview with the B&FT.
The valuation of the company and modalities for offloading the shares by SSNIT are expected to be finalised after a series of meetings between the parties involved, the source said.
Earlier in the month, STC officials made a plea to SSNIT to invest capital in the company or sell-off to a new investor ready to inject resources. SSNIT’s move is seen as a response to STC’s appeal, but is also possibly linked to the ongoing rationalisation of the pensions-manager’s investments, which cut across the financial, real-estate, energy and transport sectors.
SSNIT, which acquired a controlling stake in the company from VANEF in 2001, has neither injected any significant capital into the ailing transport company nor re-structured its finances, operations and administration. This has led to a steady decline in revenue and the eroding of the company’s working capital, plunging it into debt. The state owns a minority 20% stake in STC, whose current debts stand at GH¢40million.
The source at the company said its situation is not helped by the fact that the government, the minority shareholder, virtually runs the company with SSNIT assuming a secondary role. In 2009, when President Mills directed the dissolution of all boards of State Owned Enterprises (SOEs), the board of Intercity STC Limited -- a private entity -- was also dissolved. Subsequently, government appointed a new board for the company.
“The purchase of 45 FAW buses in 2005 is what has brought STC to its knees. We borrowed so much money from the NIB to purchase the FAW buses, but they did not last for two years. Those buses were not tested, and no was prototype tried. Under the normal procedure, we were supposed to be given at least two to try out. The company’s engineers were not involved in the purchase of the FAW buses. The buses disappointed us a lot,” the source said.
“In 2005 when the FAW buses were acquired, STC used to make about GH¢45,000 from the Accra branch alone, and could do 16 services from Accra to Kumasi. For the entire country, we used to make GH¢100,000 per day. Now we cannot do a single service to Kumasi and make around GH¢35,000 for the entire country.”
The fortunes of the once-vibrant transport company will continue to hang in the balance until an investor ready to invest new resources and capital takes it over, the source said. STC’s net worth dwindled from GH¢10.9million in 2000 to negative GH¢6.2million in 2009, and will continue to remain in the red if not salvaged, the source added.
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