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Vol 40 No 21

Published 22nd October 1999


Saudi white knight

A three-headed battle for control of Ghana's flagship Ashanti Goldfields Corporation began after its board declared on 28 September that it couldn't meet potential liabilities of US$450 million on its hedge book. Using financing derivatives, Ashanti had effectively bet that the gold price wouldn't go above $300 an ounce this year. With the price over $300/oz. for the last three weeks, Ashanti lost the bet and became technically insolvent. In Ghana it represents about 65 per cent of the Accra stock market's capitalisation, giving the stock exchange some international credibility and bringing in some portfolio investors. Its loss would be a symbolic blow.

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