Ghana’s Biggest IPO Takes Fresh Twist as Sale Set to Reopen

  • ADB wants Cocoa Board, state pension fund to buy stakes
  • Sale on hold since March as government withholds approval

The controversy surrounding Ghana’s log-jammed initial share sale in its biggest agricultural lender has taken a fresh twist.

The Agricultural Development Bank Ltd. said it will ask the West African nation’s securities regulator for permission to reopen the sale to give two state-owned entities -- which didn’t participate in the initial public offering -- an opportunity to buy shares. That may mean a delay of as much as two months before investors receive their shares, ADB spokesman Solomon Atefoe said on Monday.

“It’s rather unfortunate that our money is lying idle,” Kisseih Antonio, managing director of asset management at Ecobank Capital Ltd., which bought shares in the IPO withouot disclosing the amount, said on Tuesday. “There must be something paid to investors in terms of interest. We will meet as an organization and decide the way forward.”

The IPO has been on hold since March, when ADB raised 450 million cedis ($116 million), as the government and central bank -- which own the lender -- missed two deadlines to sign off on the deal. Investors, whose money has been lying idle and who may now see their allocations reduced, are not impressed. Opening the sale for a second round of bids may mean investors in the initial offering would see their allocations reduced, according to Frontline Capital Capital Advisors Ltd.

‘Closed Issue’

“A closed issue should’ve been a closed issue,” Kenneth Mpare, general manager at Frontline, said by phone from Accra, the capital. “If they were not able to meet the target then there would’ve been reason to reopen it. With all intent this deal was closed.”

The government was the largest shareholder in ADB and sold an undisclosed portion of its 52 percent stake. The Bank of Ghana owned the rest.

Ghana’s Securities and Exchange Commission will consider any written request from the bank regarding its share sale, Director General Adu Anane Antwi said Monday by phone. “The letter will let us determine the way forward.”

Anchor Investors

The four largest participants in the initial sale bought about 72 percent of the shares that were offered, Atefoe said, without naming the investors. ADB is in talks with the Ghana Cocoa Board and the Social Security and National Insurance Trust, the state pension fund and the nation’s biggest investor, to buy shares in a second round of bidding next week, he said.

“The anchor investors whom the transaction advisers sold shares to initially were not in line with terms of reference,” Atefoe said. “We’re now re-engaging to get our preferred anchor investors.”

Michael Darko, executive director at IC Securities, which acted as the transaction adviser, didn’t answer calls seeking comment.

The Ghana Stock Exchange had hoped the sale would boost trading volumes, helping to spark a recovery after the benchmark index fell into a bear market earlier this year. The index dropped 0.2 percent Monday, bringing its loss this year to 11 percent.

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