Government is yet to take a decision on whether to buy the 80 percent stake of the Social Security and National Insurance Trust (SSNIT) in the troubled Intercity STC Coaches Limited (STC).
This comes two months after SSNIT wrote to STC?s company secretary and government informing them of the company?s intention to dispose off its stake in the company. Government, who has the first option to buy SSNIT?s shares, is yet to respond, a senior official of the transport company said in an exclusive interview with the B&FT.
?The disinterest in STC is so glaring. STC as at now cannot sustain itself without the support from somewhere else. As we speak, SSNIT has categorically written that it is selling off its 80% stake in the company.
?There are so many companies that have expressed interest in STC. But since government has the first option to buy SSNIT?s stake, we are looking to government; but right now it has not decided whether to buy or not. Government needs to take a decision, quick.?
While waiting on the next move from government, the company is currently on the brink of collapse. Lack of buses to service the company?s regularly routes is exacerbated by the immobilisation of 20 buses by J.A.Plant Pool — owing to the inability of STC to service its debts which stands at GH?977,000. Per the arrangement, STC had to pay GH?17,500 daily to the latter.
It is estimated that the company has lost about GH?308,000 in revenue within the last two weeks due to the lock-down of the buses.
Prudential Bank Limited has also secured a court order to sell the administrative building of the ailing transport company situated at the STC yard in Accra. The total debts owed the bank amount to US$3million.
The B&FT learnt that a number of business entities have expressed interest in acquiring the company, but the inaction of government has left the STC in limbo.
?Now, more than before, people willing to partner the company in its joint venture arrangement. A lot of others are interested in acquiring the company.
The troubles of STC, which was valued at GH?7.2million as at 2000, began with acquisition of the company by VANEF.
VANEF, unable pay fully for the stated value of the company by the Divestiture Implementation Committee (DIC), approached SG-SSB bank for a loan to enable it acquire the largest public transport company at the time. SSNIT acted as a guarantor for the loan. Subsequently, the name of the entity was changed from STC to VANEF STC Limited.
Though VANEF operated the entire fleet of the transport company, it failed to pay the loan. This left SG-SSB with no choice but to recoup the loan from SSNIT, the guarantor. SSNIT in turn, activating a clause in an initial agreement with VANEF, re-possessed the company and re-named it Intercity STC Coaches Limited in 2001.
However, since the acquisition SSNIT has neither injected any significant capital into the company nor restructured its finances, operations and administration. This has led to a steady decline in the company?s fortunes and eroding of the company?s working capital, plunging it into a mountain of debt.
The company in 2005 secured a loan for the purchase of 45 Faw buses, but the buses did not last for a year. This affected the entire operations of the company and brought it to its knees.
From a company that used to make about GH?45,000 per day from the Accra branch alone, and could do 16 services from Accra to Kumasi, it now makes about GH?35,000 per day for it entire operations nationwide.
The fortunes of the once-vibrant transport company have dwindled very fast. Its net worth dropped 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 said.