[ 2016-12-14 ]

adb begins trading on GSE
The Agricultural Development Bank (ADB) yesterday
begin trading on the Ghana Stock Exchange after
having successfully raised about GHc325.7 million
in its Initial Public Offer (IPO).

With a total applicant of 405, adb sold out
122,937,718 ordinary shares with majority going to
the institutional shareholders.

The Retail applicant’s total shares bought
represents 98.77percent of the shares sold out by
adb while the five institutional applicants or
shareholders represents 1.23%.

According to the bank, though the Retail
applicants in percentage terms seem to be in the
majority, they had a total of a little above 5
million shares as the bank raise a little above
GHc13.5 million from them.

This comes after the bank in December 5, 2016
completed the IPO of existing ordinary shares at
an offer price value of GHc2.65 per share.

The five institutional investors also paid a
little above GHc312.1 million, receiving a total
of a little above 117.8 million shares.

Currently, the local stock market comprises 35
companies including multinationals like Tullow Oil
Plc, Ecobank and Standard Chartered Bank.

The listing of adb makes it the 36 company and the
10th bank to list on the bourse while they also
become the 4th wholly Ghanaian owned bank to be
listed on the stock exchange.

But the GSE is also awaiting the listing of its
11th bank which is Access bank. When listed they
will be the first Nigerian based bank to list on
the Ghana Stock Exchange bringing to 37 total
number of companies listed on the GSE.

Information available to the B&FT indicates that
the board of adb in a meeting on October 25, 2016
on the IPO agreed on a new structure which has now
seen the government cede 20 percent of the
company’s shares to an American-based financial
firm, Belstar Capital Limited, while the
government retains majority stake of some 32.3
percent of the bank's shares.

The board said the new structure is in line with
conditions for government’s approval of the
listing on the Ghana Stock Exchange.

As a result, other companies such as SSNIT have
been allocated 9.5% of the shares while Starmount
Development Company Limited gets 11% and SIC
Financial Services 10%. Others are EDC Capital of
ECOBANK 6%; and Stanlib, a subsidiary of Stanbic
Bank Group, also gets 4%.

It is imperative to indicate that, the Bank of
Ghana through this IPO has ceded off its shares in
the bank.

Though the bank was expecting to raise GHc
383,713,995.10 from the offer, the proceeds raised
from the Offer was the sum of GHc325, 784,952.70
relative to the expected proceeds representing
some 85 percent subscription level.

In an earlier statement copied to the B&FT, the
bank said all successful applicants with Central
Securities Depository (“CSD”) accounts will
have their CDS accounts credited with their
allotment by 5:00pm 09 December, 2016.

Meanwhile, successful applicants without a CSD
account will be mailed a Letter of Allotment from
yesterday December 12, 2016 which they can present
to any Licensed Dealing Member of the Ghana Stock
Exchange to dematerialize onto the CSD.

In addition, adb is also expected to refund an
amount of GHc 205,878.50 to two retail applicants
as their offers were rejected by the bank. It is
not clear what led to the rejection but the refund
was to be done not later than the Monday December
12, 2016.

IC Securities (Ghana) Limited acted as Sole
Financial Advisor and Lead Sponsoring Broker in
respect of the ADB IPO.

NTHC Securities acted as co-sponsoring broker in
respect of the ADB IPO.

Source - The Business & Financial Times

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