ESLA plc to issue GHC260m bond Monday

The Energy Sector Levy Act (ESLA) Plc will, on Monday, 30 December 2019, seek to raise GHS260 million additional funds via a 12-year Ghana cedi denominated bond.

This will represent Tranche E4 under the GHS10-billion programme.

The bond sale was opened to the investing public on 24 December 2019 and will mature on 15 December 2031.

In a statement, ESLA plc said the minimum and maximum issue sizes are expected to be GHS100 million and GHS1 billion, respectively.

ESLA Plc has, since inception, issued bonds worth GHS6.664 billion. This resulted from issuances in November 2017 (7-year tranche E1 and 10-year tranche E2), January 2018 (tap of 10-year tranche E2-B), August 2018 (tap of 10-year tranche E2-C) and June 2019 (10-year tranche E3), August (tap of 10-year tranche E2-C) and June 2019 (10-year tranche E3).

Significantly, a buy-back and subsequent cancellation of bonds worth GHS664 million in June 2019 brought the total outstanding bond under the programme to GHS6 billion.

The bond proceeds, ClassFMonline.com understands, will be used to settle outstanding legacy debts and other energy sector obligations.

The statement further said ESLA will continue to issue bonds and undertake periodic buy-back and cancellation of outstanding bonds as and when the need arises.

Meanwhile, ESLA says it has received the required approval from its bondholders to reduce the ‘Additional Bonds Debt Service Coverage’ Ratio (under Condition 12.3 (c) of the prospectus dated October 12, 2017) from 2x to 1.25x.

The reduction required the votes of the bondholders of ESLA Plc holding a minimum of 75% of the aggregate outstanding bonds. Subsequently, bondholders holding a total of approximately 79.1% of the outstanding bonds have, by way of a written resolution dated 4 December 2019, voted in favour of the reduction.

ESLA was introduced to facilitate the reduction of the energy legacy debts that had engulfed the energy sector.