Ecobank Transnational launches share offer

Accra, Aug. 25, GNA - Ecobank Transnational Incorporated (ETI) on Monday launched simultaneously the first ever cross-border shares to raise 2.5 billion dollars to expand its operations in Accra and nine other African countries.

The offer, the biggest in sub-Saharan Africa, will run through October 3, 2008.

Mr Mike Ashong, Managing Director of Ecobank Development Corporation (EDC) said 56 percent of the expected capital would be invested into existing subsidiaries in 25 countries, 22 percent for mergers and acquisitions of "vulnerable" banks while 14 percent will be invested in new markets.

Part of the money would be spent on technology and upgrading of processing equipment, he added. The 2.5 billion dollars equity offer consists of one billion dollars rights issue and 1.5 billion dollars public offer. Both will run concurrently.

ETI also hopes to raise 500 million dollars through debt issues. Under the offer, more than 3.5 billion ordinary shares of 0.025 dollars each and 0.27 dollars per share in a ratio of five new shares for every nine existing shares would be held payable in full on application and an offer for subscription of more than 5.1 billion ordinary shares of 0.29 dollars payable in full on application. The nine other African countries where the launch was done were Benin, Burkina Faso, Cote d'Ivoire, Guinea Bissau, Mali, Niger, Nigeria Senegal and Togo.

If all the shares are not offloaded by October 3, 2008, they would be entered into the Global Depository Receipt on the London Stock Exchange.

Launching the offer, Mr Kwadwo Baah-Wiredu, Finance and Economic Planning Minister, identified the banking and financial sector as the most positioned sector that would reap the expected benefits of the oil find within the medium to the long term.

"At the end of May 2008 for instance, total assets of the banking sector grew by 37.1 per cent year-on-year to GHC 8.4 billion. Credit growth to enterprises and households remained robust and broad based. Credit to the private sector and institutions went up by GHC 1.7 billion, depicting 58 per cent annual growth as at May 2008. Credit to the private sector alone rose by 50.3 per cent (GHC 1.2 billion) as at May 2008 compared to 47.8 per cent during the same period in 2007," Mr Baah-Wiredu said.

Using the recent divestiture of Government's holdings in the State Insurance Company and the Ghana Oil Limited, the Finance Minister pledged Government's commitment to the development of the capital market.

He announced the automation of the Ghana Stock Exchange and said private sector participants and individual investors in the capital market were expected to show greater dynamism and interest to deepen fledging markets and make them more efficient. From a beginning of 100 million dollars in 1984, ETI, with headquarters in Lome, Togo, has spread across 25 countries in West Africa. 25 Aug. 08