Accra, Oct. 30, GNA- Shareholders of Cocoa Processing Company, (CPC) a confectionery, on Thursday unanimously approved a 22 million-Euro syndicated loan for an expansion programme of the company. At an extraordinary general meeting in Accra, the shareholders also granted the board of directors the authority to review the terms and conditions of all transactions, as well as, execution of programmes in connection with the facility.

The debt financing facility, which is being facilitated by Barclays Bank of Ghana, in collaboration with three other institutions, will enable the company to increase its output from 25,000 tonnes per annum to 65,000 tonnes in the next four years.

Other financial institutions in the syndication arrangement are Ghana International Bank, the Trust Bank and the Commonwealth Development Corporation.

The loan facility attracts an interest of 2.5 percent per annum with a repayment period spanning five years after a year's moratorium. The planned expansion is in line with Government's objective to process at least 40 percent of the country's raw cocoa beans. Government is the major shareholder with 60 per cent holdings.

The country produced 497,000 metric tonnes of cocoa in the 2002-2003, up from 340,000 tons in the previous season. However, the country processes less than 20 percent of cocoa harvested in a year.

The first phase of the CPC expansion programme will involve rehabilitation and remoulding of existing bean warehouse for installation of plant and machinery to produce only cocoa liquor. The second phase will also upgrade the existing Cocoa Factory to increase the production of cocoa butter, cocoa cake and cocoa powder.

It is estimated that the expansion programme will improve the company's turnover from 570 billion cedis to 603 billion in three years. Some shareholders expressed concern about the financial arrangement, fearing that it would stand in the way of management in declaring dividends during the repayment period.

Dr Paul Awuah, Managing Director of the Company, however, allayed the fears of the shareholders, explaining that the expansion would increase shareholder value and increase the competitiveness of the company.

"This will place the company in a better position to pay good dividend in the future," he said.

Mrs Cecilia Abena Dapaah, Chairman of the Board of Directors, gave the assurance that the Board would not pursue policies that were inimical to their interest as well as that of the company.

The Cocoa Processing Company was listed on the Ghana Stock Exchange in February this year, after 40 per cent of its shares were floated in September 2002.