The Agricultural Development Bank (ADB) has announced a private placement of 39,076,924 ordinary shares of no par value to the Ghana Amalgamated Trust (GAT) in order to raise GH¢127million at a placement price of GH¢3.25 per share.
The equity injection of GH¢127million is part of the bank’s recapitalization exercise and is expected to support holistic growth of ADB. This placement was approved by the shareholders of the bank at its Annual General Meeting on August 28, 2019 and by the Securities and Exchange Commission on January 2, 2020.
A release from the Ghana Stock Exchange explained that trading will not be suspended during the Offer Period, hence shareholders on the Register of Members of Agricultural Development Bank may continue to trade their shares on the exchange as usual.
“The new shares will be admitted to the main market of the GSE and will rank pari passu to existing ordinary shares in ADB in all respects. Following the admittance of the new shares, total number of ordinary shares in issue will be 300,798,407.” Serengeti Capital Markets is the Lead Manager and Sponsoring Broker for the offer.
As at June 30, 2019, according to ADB’s unaudited half year report, the bank’s paid up capital stood at GH¢571.7million, but due to its impaired capital or losses standing at GH¢273million, that significantly reduces the capital below regulatory requirements, hence the need for the private placement.
In 2018, the bank’s shareholding structure changed under the direction of the Central Bank which saw the appointment of new board members in August, 2018 to reflect the changes.