John Kofi Mensah, ADB MD
AGRICULTURAL DEVELOPMENT Bank (ADB) has made a private placement of 39,076,924 ordinary shares of no par value to the Ghana Amalgamated Trust (GAT) to raise GH¢127 million.
The flotation of the shares, which comes at a placement price of GH¢3.25 per share, is part of ADB’s recapitalization exercise and is billed to support its holistic growth.
Unlike Initial Public Offerings (IPOs), which are open to the general public, the private placements are targeted at specific investors who usually invest huge sums of money.
Thus, GAT will have representation on the board of directors of ADB who will provide the strategic direction of the bank.
According to ADB, this is pursuant to Regulation 40 of the Ghana Stock Exchange Listing Rules, 2006.
The private placement starts on Friday, January 10, this year, and ends on Tuesday, January 14, with listing of shares planned for Tuesday, January 21.
The equity injection was approved by the shareholders of ADB at its annual general meeting on August 28, last year, and the Securities and Exchange Commission (SEC) on January 2, this year.
Serengeti Capital is the lead manager and sponsoring broker for the offer.
A communication by the bank said, “Trading will not be suspended during the offer period; hence shareholders on the register of members of Agricultural Development Bank may continue to trade their shares on the exchange as usual. The new shares will be admitted to the main market of the Ghana Stock market and will rank pari passu to existing ordinary shares in ADB in all respects. Following the admittance of the new shares, total number of ordinary shares in issue will be 300,798,407.”
GAT was created by the government to provide funding support to update local banks that were unable to meet the BoG’s GH¢400 million minimum capital requirement.
Five banks – Prudential, UMB, NIB, ADB and OmniBSIC – are billed to receive various sums of money to complement their capital levels to meet the regulator’s approved standard.
GAT will be receiving the funds from the Finance Ministry after presenting a plan to raise the money through a bond sale.