Business News of 2014-07-11

CAL Bank secures $28.5m capital credit

CAL Bank has secured a $ 28.5 million capital credit from French government development finance institution, Societe De Promotion Et De Participation Pour La Cooperation Economique S. A.(PROPARCO).

A release issued by the bank said the loan agreement was signed by Mr. Frank Adu, Managing Director of CAL Bank Ghana and Mr. Julien Lefilleur, PROPARCO's Regional Director for West Africa.

The credit agreement further strengthens a 20-year-old relationship with PROPARCO, CAL Bank said.

"This agreement attests to the confidence PROPARCO continues to repose in the performance and leadership of CAL Bank as a leading player in the Ghanaian banking sector. Accessing this capital will result in the upward movement of the single obligor limit of the Bank enhancing the Bank's ability to undertake big ticket projects. The achievement of this planned strategic milestone in our capital plan will enable us continue with our sterling performance over the past 3 years, strengthen our financial position and enhance shareholder value", Mr. Frank Adu Jnr said.

PROPARCO is a long-standing debt financier of CAL Bank. It acquired a 6.86% stake in the bank in June 2012.

The agreement covers a subordinated credit facility to finance CAL's activities.

The unsecured loan facility will be used as Tier 2 capital in supporting CAL's on-lending activities. The facility provides CAL Bank with competitive interest rates under flexible terms and conditions, the release explained.

Proparco is CAL's 3rd largest shareholder with 6.86% shareholding, after SSNIT (33.18%) and African Development Partners of Mauritius ((27.69%).

Over the past 20 years, PROPARCO has been instrumental in providing competitively priced medium term credit lines for onward lending to CAL's corporate clients and SME's.

PROPARCO in 2005 and 2007 also granted CAL $10m credit for the operations of the Bank whereas in 2010, $5m was invested in the Bank as equity.

Mr. Frank Adu finally assured PROPARCO that the credit facility will be used for the purposes as provided in the agreement and pledged the commitment of management and staff to continue delivering the performance CAL has come to be recognized for and associated with.

Source: myjoyonline.com
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