ADB to re-launch IPO in November, targets 5 companies

Citi Business News has gathered the Agricultural Development Bank (ADB), will re- launch its Initial Public Offer (IPO) by middle of November after it failed to successfully complete the offer in June, 2016.

Documents cited by Citi Business News from the board of directors of the bank dated October 28, 2016 reveal that the IPO has been slated from the middle of November and will be concluded by the end of 2016.

The bank, however in a bid to ensure the IPO is successful this time round in collaboration with the Finance Ministry, will be bringing on board some government institutions as well as private companies.

A memo cited by Citi Business News to that effect stated that the bringing on board of the institutions and companies will lead to the creation of two shareholding scenarios where in the first scenario, government will hold 30 percent stake while Belstar Capital will have 51 percent stake, the state pension fund manager Social Security and National Insurance Trust (SSNIT) will also have 12 percent and the remaining stakes will be shared among ADB staff and the public.

The second scenario will see government owning 32.3 percent stake, Belstar Capital 20 percent, SSNIT owning 9.5 percent, Starmount Development Company Limited 11 percent, SIC Financial Services – 10 percent, EDC Capital – 6 percent, 4 percent goes to STANLIB, while 5 percent will go to ADB staff and the remaining 2 percent to the general public.

Citi Business News has gathered the Board of directors of the bank has settled on the second scenario.

However  per the agreement parties(companies/institutions) involved in the second scenario will have to abide by five rules including giving government the sole right to appoint the board chairman and MD of the bank, pledge that they intend to acquire the share for themselves and not fronting for a third party.

ADB in June this year announced it intended to refund monies raised from its IPO after shares were sold at 2 cedis below the 2 cedis 65 pesewas expected.

Prior to that announcement, the Securities and Exchange Commission (SEC), directed the refund of monies to subscribers of the bank’s IPO after the bank rejected offers purchased at 2 cedis.

An earlier statement issued by the SEC on the matter at the time and copied to Citi Business News indicated that ADB received a total subscription of about 438 million cedis at the close of the offer.

However with the decision of the bank to reject the offers made at 2 cedis which amounted to about 435 million cedis, the bank was unable to satisfy the minimum subscription of 100 million cedis set in the prospectus to enable it proceed to list on the Ghana Stock Exchange.

New documents however sighted by Citi Business News show that the share price of the share has now been valued at 2 cedis 14 pesewas minimum, 2 cedis 2 cedis 65 pesewas maximum and 2cedis 40 pesewas average.

The figures were arrived at following an independent evaluation by Ernst & Young.

By:  Vivian Kai Lokko/