Business News of Saturday, 14 March 2015
Pharmaceutical firm, Intravenous Infusions Limited (IIL) has temporally suspended its Initial Public Offer (IPO).
The suspension of the IPO follows the inability of its sponsoring broker and lead manager, First Atlantic Brokers Limited (FABL) to fulfill the underwriting obligation of providing the payment guarantee for the minimum amount to be raised to make the offer successful.
Per the GAX rules the sponsoring broker must be able to underwrite 25 percent of the payment guarantee for the minimum amount to be raised. But Finance Director of Intravenous Infusions Limited Soaliho Mohammed Mouktar told Citi Business News First Atlantic Brokers were unable to meet the condition.
‘Some of the GAX conditions per their rules is to deposit what we call a guarantee which is about 25 percent of the offer and this is a condition precedent. So due to their inability to provide the guarantee we were advised by the Securities and Exchange Commission as well as GAX to put on hold the IPO temporally while we look for another brokerage firm’.
In the interim he tells Citi Business News First Atlantic Brokers Limited’s appointment as Lead Manager and Sponsoring Broker for Intravenous has been terminated.
‘Intravenous has terminated its appointment with First Atlantic over its inability to fulfill its underwriting obligation of providing the payment guarantee for the minimum amount to be raised to make the offer successful’. He added that efforts are being made to get a new lead manager.
‘We plan contacting four companies, we have had discussions with three, and all have shown interest. We are planning to have a consortium of brokerage firms to make it easier to push the transaction through’.
Intravenous Infusions is hoping to raise 18.396 million cedis through the IPO and per the GAX rules the brokerage firm must be able to underwrite a minimum of 25 percent of the offer.
Meanwhile Soaliho Mohammed Mouktar has assured that ‘all those who have already subscribed to the shares still have their processes valid.
‘Efforts are being made to appoint a new Lead Manager and a Sponsoring Broker to continue and carry through with the transaction. Anyone who has made arrangements with ILL concerning the offer is assured that their arrangements are still valid.’
He mentioned that the matter will be solved within a month. Meanwhile SEC has expressed disappointment with the latest development.
According to the Director General of SEC Dr. Adu Anane Antwi ‘of course you will want this process to go on without any hitches, so we are not happy with the latest development.’ He said.