Ghana's ADB to Get Cash Boost After Lender's Share Sale Flops

(Bloomberg) -- Ghana’s Agricultural Development Bank Ltd. will get a cash injection from a special purpose vehicle created to bail out struggling lenders after a share sale fell short of target.

The state-owned bank known as ADB will receive between 100 million cedis ($19 million) and 150 million cedis from Ghana Amalgamated Trust Ltd. to help it meet minimum capital requirements, said Tanya Malhotra, a director at Accra-based Serengeti Capital Ltd., which was hired by the company to handle the process. ADB raised 146.6 million cedis in a rights offering that closed on March 28, falling short of its 233 million cedis goal.

While the Bank of Ghana through its Financial Investment Trust took up all of its rights, the government deferred its part in the offering to Ghana Amalgamated Trust, Malhotra said.

ADB reverted to state control in July when the central bank annulled deals for more than half of the shares, following an initial public offering in 2016 that had been marred by delays and disputes with opposition leaders and labor unions. The government in December rescinded a decision to merge ADB with its National Investment Bank Ltd., only weeks before the new capital requirement of 400 million cedis was due to kick in.

Ghana Amalgamated Trust was created by the government to invest in under-capitalized that will be funded through the sale of 2 billion cedis in five-year bonds that will pay a one-off annualized interest rate of 21 percent when they mature.

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net, Vernon Wessels, Andre Janse van Vuuren

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