Business News Thu, 28 Jun 2018

ADB to raise GH¢310m through renounceable rights issue

The Board of Directors of ADB have agreed to use a renounceable rights issue to raise GH¢310 million in fresh capital to be able to meet the Bank of Ghana's new minimum capital of GH¢400 million, Graphic Online has gathered.

The board is due to request shareholders' approval for the rights issue at the bank's annual general meeting scheduled for July 18, 2018.

If successful, the capital raising exercise will increase ADB's minimum stated capital to GH¢585.1 million, above the new requirement of GH¢400 million by December this year, Graphic Online gathers.

The bank currently has GH¢275.1 million in stated capital and a deficit of GH¢189.4 million in income surplus.

The bank, however, said in the notice outlining the agenda for the AGM that approval of the capital raising exercise, will also allow the board to use "other capital raising methods to raise additional capital to make up for any shortfall resulting from the rights issue."

It is not clear if the government, which, together with other quasi-state entities, hold 52.2 percent in ADB, is part of the planned capital raising exercise due to be tabled before shareholders.

This is key, given the counter plans for the bank over the past one year.

The Minister of Finance, Mr Ken Ofori-Atta, had, in November last year, revealed government's intentions to consolidate the ADB and the National Investment Bank (NIB) into a proposed national development bank.

The board of ADB said at the time that it was not aware of the plan.

Despite being a largely state-owned bank, the ownership of the SIC Financial Services Limited’s 10 percent in the bank is currently in dispute.

Belstar Capital, a shareholder of ADB, is claiming ownership of the stake for SIC FSL's inability to pay for a loan it took from the latter to purchase the shares.

Source: Graphic.com.gh
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