Business News of Wednesday, 29 January 2020
Source: www.ghanaweb.live
2020-01-29How $5m losses resulted in imminent shutdown of Neoplan - Report
play videoNeoplan Ghana Limited
Neoplan Ghana Limited’s imminent shutdown expected to take place on Friday, January 31 is caused by a US$5 million loss in revenue and lack of efficient production activities.
Checks by www.ghanaweb.com indicated that the once vibrant company sold 20 percent shares of the company to Man Diesel, a German manufacture and had to settle a debt of US$173,000 it paid
Read full articleto gain ownership of the entity in Ghana.
Sources at the company said the decision had been informed by the inability of the minority shareholder, the Fadoul Group, to continue funding the company all by itself, while the government which owned the majority shareholder contributed nothing to its operations.
In 2016, the company approached the government to help settle a debt of US$173,000 to gain an additional 20 percent shares in the company.
However, it was said government did not release the shares to the company and that has resulted to its current predicament.
“In the past six to seven years we have been operating the company ourselves without any contribution from the government and we’ve made a loss on about 5 million dollars since operations commenced. In 2016, we asked the government to buy additional shares from them so that we can finance the company ourselves but they refused,” the General Manager earlier told reporters.
The source also revealed that the minority shareholders of the company had invested about GH¢10 million in the company, while a sum between GH¢200,000- GH¢260,000 had been lost every month in revenue during the period.
When GhanaWeb visited the premises of the Achimota service station of Neoplan Ghana Limited on January 28, some few workers present reiterated their frustrations and concerns about the imminent closure of the company and described it as unfortunate.
Joseph Tetteh, an Assistant Supervisor at the service station who has been working there for 23 years said; “I feel very bad that this company is about to be shutdown because this is only place that we get our daily bread and it will affect us a lot”
“The whole company takes about 1,000 plus and now we’re left with about 100 people so you can imagine if there’s no production then they have to lay us off”
Tetteh adds, government which owns majority shares in the company, has 4 members on the company’s board with the company itself having 3 members on its board.
“Fortunately, on the governments board, two of them are no more with just two remaining and even with that, there's only one person that can speak with the other one not being physically well. Due to this, the companies board and government board cannot sit down to think about the future of the company”
Another, Eric Koranteng who has been with the company for 15 years said the news of the imminent shutdown has ‘sent shivers all over his spines’.
“When we got the news, we got very frightened and we are appealing to government to come to their aid because government is the majority shareholder of this company and the managers at the moment just have 45 percent of shareholders and to we the workers, we didn’t know anything about the shutdown until we heard the news from Kumasi”
Ernest Opoku Agyeman, an electrician of the company on his part said; ‘I think this situation is unfair because the President himself told us to buy our own goods and here comes the case where we’re building our own buses and no one is purchasing it and even the contract is not coming,” he lamented.
Neoplan shutdown
Neoplan Ghana Limited since it’s setup on December 12, 1974 has produced over 4,000 buses for Ghana and surrounding economies but it has been scheduled to shutdown on January 31, 2020 according to a memo by the company due to unprofitability and recurring monthly losses as reasons for the shutdown.
The memo dated on January 15, 2020 and signed by the Managing Director of the company, Mr Georges Nassar titled; “Closure of Neoplan (Ghana) Limited”: “Management regretfully informs you that Neoplan (Ghana) Limited will be closing down its branches on 31st January 2020.”
“This is due to lack of contracts and recurring monthly losses incurred. As a result, all employment contracts with the company will be terminated as of the said date until further notice,” the memo added.
The company said the last time it was given a government contract was in 2002, which ended in 2010 and saw the production of 450 DAF/VDL buses for the Metro Mass Transit Limited.
