Ghana Oil Retreats as Traders Query Bonus Plan: Accra Mover

Ghana Oil Co., the country’s second-biggest operator of fuel stations, fell to the lowest in almost three months as traders questioned a plan to give bonus shares and hold a rights offer.

The stock declined 4 percent to 1.20 cedis by the close in the capital, Accra, the lowest since April 12. Trading volume was equal to 52 percent of the three-month daily average.

The company will give one new share for every 100 held in the 2.1 million-share bonus, it said in a statement published in the Accra-based Ghanaian Times newspaper today. It will ask investors at a meeting on July 25 to approve a plan to raise 100 million cedis ($49 million) by selling shares to existing holders or in private placements, it said.

No reason for raising cash was given. Managing Director Patrick Akorli wasn’t available to comment, according to a person who answered the phone at Akorli’s office.

“Investors are not happy because the company would have to spend money to pay for the bonus shares,” Xorlali Torsu, a stock trader at Databank Financial Services Ltd. in Accra, said by phone. “If the company has money to do a bonus, why won’t they use it for capital like they are seeking through the rights issue?”

The company, which has gasoline stations under the Goil brand name, will ask investors to approve the transfer of 20 million cedis from retained earnings to its stated capital account, according to the statement. Torsu expected that money will be used to pay for the bonus shares.

“I would have thought they will go ahead with the rights issue and hold on the bonus offer,” Victor Abevor, a stock trader at CAL Brokers Ltd. in Accra, said by phone.

Ghana Oil’s shares are fairly liquid, he said, unlike Total Petroleum Ghana Ltd.’s stock. The unit of French oil company Total SA runs the largest network of fuel stations in Ghana. It’s offering 97.9 million bonus shares to investors this year in a ratio of seven new shares for every one held, it said on May 6.

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