ALUWORKS is offering 75,000,000 ordinary shares of no par value at GH�0.40 per share to current and prospective shareholders to raise GH�30,000 to recapitalize its operations.
The offer is in the ratio of 9 new shares for every 5 existing shares, representing a 9 percent discount off the current market price of GH�0. 44 per share as at Friday, March 12, 2010. A.W.B. Barnor, Managing Director of the company, disclosed this on Monday in Accra at a meeting with the press.
According to him, the offer would initially be opened to shareholders. �In the first instance, current shareholders are allowed 9 shares for every 5 that they already own. They may apply for more than their normal allotment if they so wish.
Any shareholder who decides not to partake in the offer must fill an appropriate form to declare so, and must understand that such shares would be allocated to other interested parties,� he added.
Open to both resident and non-resident Ghanaians as well as foreigners, the offer, which began yesterday, ends at 5 pm on Friday, April 16, 2010 while trading in the rights, which also started yesterday, ends on April 9, 2010. �The GSE has approved the listing of the 75,000,000 new shares to be issued on the first official list and as such trading in these shares would commence on May 12, 2010.
Shareholders who wish to exercise their rights and renounces should contact NTHC Securities Limited, Adabraka, the manager and sponsoring broker of the ALW Rights Issue for assistance and direction,� he emphasized.
Explaining further, Mr Barnor said the performance of Aluworks on the GSE shows a creditable price trend since the listing of the company.
�From a listing price of GH�0.1350 per share in November 1996, the equity grew gradually to hit an all-time high of GH�1.25 on April 14, 2004. �As at Friday, March 12, 2010, Aluworks traded at GH�0.44, signifying a total growth of more than 225 percent over its listing price. �In addition, the equity has been one of the most actively traded stocks on the exchange over the years,� Mr Barnor reiterated.
The MD added that the dividend history of Aluworks suggest that until 2007, the company had one of the best dividend payment records in the country, explaining that �it paid dividends each year until 2007. The average dividend pay-out was 68 percent.�
W.E. Inkumsah, Board Chairman of Aluworks, in a speech, said the company, which was set up in the late 1970s, started with one 15,000 tonne caster and a 30,000 tone cold mill, noting that �slowly it has increased to three casters of 15,000 tonnes each.�
He stated that there has not been an increase in cold mill capacity since that time, but the 30,000 tonne cold mill has served the company very well over the years because of the very high level of regular maintenance. �The current cold mill capacity simply needs to be increased to meet the increasing demand that the company expects over the next few years. �Half of the proceeds of the rights issue will be used to procure a brand new cold mill. The current cold mill will also undergo refurbishment.
When that is finished and commissioned, we boast of a 50,000 tonne capacity that will be sufficient to meet the needs of West Africa and beyond.�
In 2006, when the country experienced deep energy crisis, which led to an increased disruption of supply from our traditional local supplier of ingots, the company had to import ingots with an attendant 33 percent increase in cost, which reduced the company�s profit margin.
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