Shock at Merchant Bank after FirstRand acquisition fails
The workers are now gripped in anger and disbelief and are wondering the next line of action as they are not sure when another bidder will show up and when the deal will finally be consumated to turn around the fortunes of the bank.
SSNIT has consequently announced its intentions to reopen the process up to prospective bidders, but some staff of Merbank are of the view that time is not on the side of the bank because of its huge financial distress and the heightened competition within the sector.
SSNIT announced on Friday July 12, 2013 that South African bank, FirstRand Limited’s offer to acquire Merchant Bank Ghana (MBG) could not be completed as announced in August 2012.
A statement issued by the Corporate Affairs Manager, Ms Evangeline Amegashie in Accra on the collapse of the deal said the parties were unable to reach agreement on the commercial principles underlying the transaction and could not procure the fulfillment of all the conditions.
It announced that SSNIT would start a new process to invite proposals from interested parties for the acquisition of the Merchant Bank Ghana. The statement said ‘FirstRand Limited said it was disappointed not to have concluded the transaction,’ adding however that, Ghana remained a priority country for expansion and the Group would continue to engage SSNIT on its new process.
Though FirstRand Limited in 2012 disclosed its intention to acquire Merchant Bank Ghana, it could not succeed because the original legal and regulatory time frame agreed had officially elapsed, it added. -
In a random opinion sample from some of the staff following the announcement, they expressed regret at the failure of FirstRand to complete the deal.
The issues with the huge non-performing loans of the bank has led to the need for recapitalisation of the bank to regain its pride of place.
The debtors of the bank who are well known are not being pursued to honour their obligation and financial experts have indicated that unless the bank ownership changes from the present to what they described as a ‘more serious and independent owner’, the bank will suffocate.
A May 5, 2012 communique issued and signed by all 350 members of staff of the bank and published on some international websites, said the bank had earlier last year indicated its acceptance of the takeover because it argued that following painstaking processes embarked upon by the bank and its shareholders which include staff of the bank acting through the Trustees of our Permanent Staff Provident Fund, an agreement was reached to welcome the participation of FirstRand as a strategic investor.
It maintained that after reviewing the facts and figures behind the name First Rand and the dynamics of the transaction, they were fully convinced that our shareholders took the right decision in approving the transaction.
‘First Rand was participating in this transaction by an agreed injection of cash of GHc176.4 million into Merchant Bank and was against this background that the staff were of the conviction that their bank would be able to leverage this cash injection to support the economy of Ghana’, the communique said.
The communique said it is on record that FirstRand is a financial services group with world class bank management and risk management expertise and, bringing along those skills to Merchant Bank will go a long way to improve the risk management profile of the Bank and turn around the fortunes of the Bank in the next few years.
By Charles Benoni Okine/Graphic Business/Ghana
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