SSNIT woos strategic investors for its nonperforming agencies

By Eugene Davis

The Social Security and National Insurance Trust (SSNIT) says it has exited from some of its investments and begun processes to attract strategic investors to take up stakes in some of its non-performing portfolios to ensure value for money is achieved.

Appearing before the Public Accounts Committee (PAC) sitting in Accra last week, to give further details on the status of some 15 nonperforming agencies, the Deputy Director-General, Investment and Development, Mr. Ko Bosompem Osafo-Maafo, said the trust have taken inventory of all these assets and have sold o some of its stakes and is also courting strategic investors to leverage on some of the viable assets.

Mr. Osafo-Maafo explained the various status of the portfolios, stating that for CDH - The company’s performance has not improved and SSNIT has o ered its equity stake in the company for sale since 2014.

In the case of Metro Mass Transit Ltd (MMT), SSNIT management stated that they have received the company’s audited accounts for the period 2016 to 2020 and will continue to monitor the company to ensure shareholder value is preserved.

It said the Trust entered into this investment as part of its corporate social responsibility at the onset and has, thus, classi ed it as an Economically Targeted Investment (ETI) in its asset’s classi cation.

It added that MMT has not been able to make pro t because it was set up to provide a ordable, safe and reliable inter and intra city transport services targeted at the lower income class of workers.

“It has contributed to job creation, improved livelihood and helped expand contributor base of the Trust. It continues to play a crucial role in aiding accessibility to jobs, shops, schools and healthcare,” SSNIT said.

Due to its focus, it hardly increases its fares despite consistent increases in its cost of operation. The initial investment value in this Company is GH¢633,753.

With regard to Accra Abattoir Company Limited (AACL), which was initially, categorized as an Economically Targeted Investment (ETI). Management of SSNIT said AACL has not been able to break-even as expected and its market share keeps reducing as new and more modern abattoirs spring up. SSNIT is still working to exit the company.

Management has engaged the State Interest and Governance Authority (SIGA) on the way forward. An interested investor is undertaking due diligence on the company.

FOS Aluminium (FOS) - SSNIT has reduced its exposure to FOS. It has swapped its debt of US$1,301,000 plus interest with land owned by the company. Therefore, as at 31st December, 2018, SSNIT no longer has any debt facility with FOS.

Kumasi Abattoir (KACL) -SSNIT is working on an exit strategy to sell its stake to or bring in a strategic investor. The prospective strategic investor is undertaking due diligence. A Resolution was passed at the last AGM for the Abattoir to sell some of its land to repay the debt it owed the Trust. The sale of the land will not a ect the commer cial operations of the company and is expected to signi cantly improve the nances of the company.

Trust Sports Emporium Limited (TSEL) - Discussion on proposed swap has commenced with the Ministry of Youth and Sports (MOYS). A joint technical committee with members from both SSNIT and the Ministry has been formed.

NTHC Limited - There have been several discussions and meetings on NTHC Limited, which culminated in the conversion of a part of the debt owed to SSNIT into equity and preference shares. The conversion has enabled NTHC to prepare its Financial Statements for presentation to SEC as part of its restructuring strategy and meeting its regulatory requirements.

NTHC is in discussions with SEC on the way forward.

Intercity STC Ltd (ISTC) – The External Auditors of the company have recently completed the audits of 2013 to 2020 nancial statements. The audited accounts for the period 2013 to 2020 have been signed by the ISTC Board and approved by Shareholders at an Annual General Meeting held in November 2022.

The company secured a facility from Agriculture Development Bank to acquire 100 new buses and has built a new Driver and Vehicle Licensing Authority (DVLA) Centre with four terminals at the ISTC yard through a public private partnership and which has started operating. These measures would help position the Company to successfully turnaround to perform pro tably.

Trust Logistics Ltd (TLL) - SSNIT is monitoring the implementation of the turnaround strategy that has been developed with the company to improve its performance.

commenced operations within the year under review. It was the expectation that business would steadily grow and gradually improve over time. COVID-19 however disrupted this growth pattern.

Golden Beach Hotels – SSNIT started a process to bring in private strategic investors with the aim of turning the hotels round to pro tability. As part of the process, a Transaction Advisor was engaged. The Transaction Advisor has conducted all due diligence, prepared estimates of needed improvements, prepared the Information Memorandum (IM) for the sourcing of the Strategic Partners (SPs), and prepared a Request for Proposal (RFP) as part of the sourcing process. An international Expression of Interest was published, and receipted interests were evaluated, and a shortlist of prospective SPs has been prepared. The RFP and IM have been issued to the shortlisted rms, Data Room created and opened to them for their access to relevant information to aid in their preparation of proposals. Proposals have been submitted and the Technical Proposals opened. Evaluation of the Technical Proposals are ongoing.

Ghana Industrial & Commercial Estates Limited (GICEL) – The court ruled in SSNIT/GICEL’s favour but Ghana National Association of Garages (GNAG) is dissatis ed with the ruling and has led an appeal at the Courts of Appeal.

Though the company has been making periodic payments, the Trust is still pursuing it to fully recover the outstanding debt. The company has so far paid a total of GH¢233,756 to the Trust under the facility. The Trust is providing legal assistance to the company on GNAG's litigation. The Trust contin- ues to engage the company for the settlement of its indebtedness.

Grand Regency Hotel (Kumasi Catering Rest House) – SSNIT has sold its stake in the company.

RSS Developers Limited (RSS) – The rst phase of the asset-liability swap has been agreed and is being nalized, based on an independent valuation of the completed properties of the company. The Trust has initiated the legal process for the execution of the swap arrangement. A second phase of the swap, which includes the uncompleted proper- ties of RSS and vacant lands is underway.

On completion of the swap, SSNIT will rent out and sell these properties to recover its investments.

Switchback Developers Limited (SDL) – The Adinkra Heights project has been completed (November, 2022). The company has sold 36 of its 77 apartments. In view of other developments, SSNIT is taking over the company’s remaining 41 apartments and unutilised land. SSNIT has approved a budget for the company to facilitate the marketing and sale of the apartments, pending completion of the documentation covering the transaction.

With respect to Trust F-line Properties Limited (TFPL) – 24 ats have been taken over by SSNIT and another 32 ats are pending delivery to SSNIT. In all, a total of 56 ats would be delivered to SSNIT.

The chairman of the Public Accounts Committee(PAC), James Klutse Avedzi urged management to analyse these companies and retrieve monies from those that it can, and “ where if you can sell your shares and realise your money, it better than the money locked up there – no return is coming, it does not look good.”

The Minister of Employment and Labour Relations, Ignatius Ba our Awuah, who is also responsible for pensions said they would “do whatever possible to retrieve the residual, which are receivable and if possible, go ahead to liquidate, so they have clean books, these issues have been in the books dating back as late as 1993, -legacy issues which has to have a nality.”