Business News of Tuesday, 18 February 2020
Source: Business & Financial Times
2020-02-18
Felix Addo
President of the Ghana Association of Restructuring and Insolvency Advisors (GARIA), Felix Addo, is calling for the passage of the Insolvency bill which is currently before Parliament, as it would allow companies such as Neoplan that are significantly distressed to be brought back to life without necessary intervention from government.
The Insolvency bill, when passed, will significantly benefit the country and boost the country’s ease of doing business rankings, Addo notes.
The new Insolvency bill has two main key features that would significantly transform the fortunes of distressed companies, instead of such companies collapsing and being placed in receivership – which affects everyone, including creditors, staff, tax authorities, suppliers of materials or input, and the general economy.
The second feature of the yet to be passed Insolvency bill Mr. Addo touched on was ‘Post-Commencement Financing Provision’. This provision he explained, allows that once a company is in administration, a new debt can be incurred to revive the company – but this debt is ring-fenced and takes priority over all previous debts.
Neoplan Ghana Limited has been in existence for almost 46 years and assembled over 4,000 buses. It can be viewed as an asset of national interest, which is why its current distressed situation is a source of worry for many Ghanaians, particularly in terms of jobs.
We just cannot sit idly by and watch it crumble; that is why there are calls from various quarters to resuscitate it- though not at government’s expense, hence the call for quick passage of the Insolvency bill.
The ball is in now the court of Parliament to treat passage of bill with the urgency it deserves.