STC denies debt crisis

Business News of Thursday, 5 March 2015

Source: B&FT

Stc StationAccra

The Intercity STC Coaches Limited (ISTC) says it is not burdened by debt and is steadily making progress, contrary to recent reports suggesting that the company is reeling under debt.

The Business and Financial Times on Tuesday, February 24, 2015 reported that The Intercity STC Coaches Limited (STC) has piled on more debts less than a year after the majority shareholder, Social Security and National Insurance Trust (SSNIT), intervened to halt the sale of its assets by creditors.

The report stated that STC owes one spare-parts supplier about GH¢479,000 for parts purchased between May 2014 and February 2015

STC in a statement signed by the Nana Ama Asafo-Boakye, Head of Public Relations of the company said: “We would like to make it clear that when Government reconstituted the Board of Directors and appointed a new Managing Director (MD) in March, 2014, the appointees were thrown a challenge to reverse the company’s pathetic downslide.

Intercity STC was as of that time indebted, to the tune of GH¢15 million and the workers, whose salaries had not improved for nearly a decade, cared less about rampant acts of pilfering committed by known colleagues.

It had gotten to the point when the company could no longer pay its workers from its operations and had to turn to the majority shareholder, Social Security and National Insurance Trust (SSNIT). The shareholder had obliged but had treated the financial support as loans.”

The statement said that the company has “a long-standing relationship with parts supplier Richcumba Company Limited which allows for spare parts to be procured on credit. At the end of 2014, the amount owed the supplier was GH¢276,515.70. Purchases made so far this year stand at GH¢21,619.65, bringing the total sum owed Richcumba Company Ltd. to GH¢298,135.35.

It said that the monthly engineering report of Intercity STC for January 2015 indicates that STC used a total of twenty-six (26) buses for it operations though eighteen (18) worked consistently for twenty-two (22) or more working days in the month.

In addition to the company’s own fleet, the statement noted, Intercity STC has entered into alliances with other companies which provide buses to be operated under the STC brand and share the profits that accrue from such operations.

“With the introduction of two 50-seater Mercedes Benz buses from Focus Four Company Limited into service in February, the number of “alliance buses (big coaches) stands at five. Intercity STC has also just introduced its Swift Shuttle Service (started in January) with 25 brand new Toyota Hiace mini buses through an alliance with Smice International Limited based in Accra,” the statement said.

The statement said that contrary to report, “the weekly valuation report for the week from 26th to 30th January, 2015 indicated that valuation of vehicles alone earned Gh¢26,370.00,”

“Plans are far advanced to expand our services this year to include Driver and Vehicle Licensing Authority (DVLA) agency, a commercialized state-of-the-art workshop, computerized valuation service and online/mobile money ticketing. We plan also to transform our non-performing assets into profitable real estate projects. We are determined to achieve this goal by staying focused, taking prudent decisions and rendering tireless service.

What actually attracted SSNIT’s intervention was that a past Board of Directors, not confronted with any court ruling, decided to offer the official residence of the MD to tyres supplier, Caitec Automobile, to offset a GH¢500,000 debt. It was a single case involving one creditor,” the company said.