ADB finally re-launches IPO at GHC 2.65 per Share

The Agricultural Development Bank (ADB) yesterday successfully re-launched its Initial Public Offer (IPO).

This comes after adb earlier this year failed to complete its earlier IPO process because the bank could not raise the minimum amount of GHC400 million as the bank’s board rejected all offers made at the price of GHC2 per share, instead of GHC2.65 contained in the prospectus.

The offer which was re-launched yesterday Thursday November 24, 2016, according to a press statement from the bank and citied by the thebftonline.com is expected to raise 380 million cedis.

The offer which is currently on going will close on December 5, 2015 at 12pm.

According to the press statement the public share offer of ADB (the “Offer”) consists of “a sale of 69,326,036 existing ordinary shares of no par value at GHS 2.65 per share and an offer for subscription of 75,471,698 new ordinary shares of no par value at GHS 2.65 per share issued and fully paid.”

The statement further stated that there is going to be “a listing by introduction of 86,125,488 existing ordinary shares (collectively “the ADB Shares”) on the Ghana Stock Exchange”

Interested persons are expected to purchase the shares at any ADB branch, any Standard Chartered Bank branch, IC Securities (Ghana) Limited or any Licensed Dealing Member of the Ghana Stock Exchange, the statement added.

Meanwhile each application under the IPO must be for a minimum of 100 ADB Shares amounting to GHS 265.00 and in multiples of 1 ADB Share thereafter.

The in this press release also the bank advised that “before deciding whether to apply for the ADB Shares, you should consider whether the ADB Shares are a suitable investment for you.”

While admitting that the value of the share can go down as well as up, the bank indicated in the statement that “Past performance is not necessarily indicative of future performance” but optimistic that the future is bright for the bank as its goes through the procedures to list on the GSE by close of year.

ADB Board approves IPO

The Board of adb Bank has given its seal of approval for the bank to allocate majority of its shares to institutional investors’ in a move that is expected to guarantee a successful re-launch of its IPO after the initial setback, the thebftonline.com gathered.

In the Board’s memo sighted by the thebftonline.com, seven institutional investors have been allocated close to 98 per cent of adb shares ahead of the re-launch of the bank’s Initial Public Offer (IPO) in mid-November and this tweak to the share offer is anticipated to help staabilize the bank’s stock once trading begins.

According to the memo signed by the board secretary of adb bank, James K. Agbedor, retail investors will be offered only two percent of the shares, which could be seen as an attempt to deny the entire investor community access to adb shares.

Information available to the thebftonline.com indicates that the board of adb in a meeting on October 25, 2016 on the IPO agreed on a new structure which will see the government cede 20 percent of the company’s shares to an American-based financial firm, Belstar Capital Limited, while the government retains majority stake of some 32.3 percent of the bank's shares.The board said the new structure is in line with conditions for government’s approval of the listing on the Ghana Stock Exchange.