ABIDJAN, Oct 20 (Reuters) – The government of Ghana on Wednesday called for a further reprieve of 21 days for Ashanti Goldfields on margin calls on gold hedges, saying this would give it time to evaluate a bid from Lonmin Plc.
“The government decided that subject to the hedge book counterparties extending their standstill by at least 21 days, the government of Ghana would undertake the necessary due diligence to fully evaluate the Lonmin offer along with the other proposals for resolving the problems facing Ashanti,” the government said in a statement given to Reuters in Abidjan.
The statement was read over the phone by acting Mines Minister Ekwow Spio-Garbrah shortly after government ministers ended a meeting with senior Lonmin executives in Accra.
“The government and Lonmin … agreed that a necessary precondition to any solution to the current difficulties facing Ashanti is for Ashanti’s hedge book counterparties to extend the timetable of the prevailing standstill agreement,” the statement said.
The government has a 20 percent stake in Ashanti, which has run up big derivatives losses because of the recent rise in the gold bullion price.
A 72-hour standstill on margin calls agreed with 17 counterparties is due to expire at 5.30 p.m. London time (1630 GMT) on Thursday.
