Though government is yet to list Agyapa Royalties Limited shares on the Ghana and London stock exchanges, local and foreign investors have expressed keen interest in investing in this novel gold royalties-backed business, Deputy Minister for Finance, Charles Adu Boahen has said.
Mr. Adu Boahen, briefing the B&FT said: “Though Ghana is yet to list Agyapa Royalties Limited on the two exchanges, there has been investor interest from various parts of the world. Investor interest remains high”.
The main subsidiary of the MIIF and holding company, Agyapa Royalties Investment Ltd., will be listed on the London Stock Exchange (LSE) while its subsidiary, ARG Royalties Ltd., will be quoted on the Ghana Stock Exchange (GSE) – both through initial public offers (IPOs)
Agyapa Royalties Limited is a Special Purpose Vehicle (SPV) created by government to maximise the mineral royalties received from mining companies.
At a time that the precious mineral is trading at a high of about US$2,000 per ounce, experts have argued that though gold is not a currency it rivals the dollar as an international reserve asset, and has thus benefitted from the desire for diversification given the fall in real interest rates.
Under an investment agreement between the Minerals Income Investment Fund and Agyapa Royalties Limited, the Fund has assigned its right to receive 75.6 percent of royalties from a portfolio of 12 producing mines and four development assets to Agyapa. In exchange, Agyapa will issue shares worth US$1bn to the fund.
The planned Initial Public Offer (IPO) of Agyapa will offer some of the shares held by the fund to investors in order to raise about US$500m. Listing is expected to happen in the coming months.
At the end of the IPO, the government of Ghana through the MIIF will continue being the majority shareholder (51 percent) in Agyapa Royalties.
The MIIF is expected to continue receiving dividends from Agyapa, and will continue to receive royalty revenue from other operating mines in Ghana that are not related to Agyapa Royalties.
The funds realised are expected to be re-invested in the mining sector of Ghana and other countries in the sub-region. “We will see a huge uptake of investments in the Ghana mining sector based on this IPO. This is essentially a marketing cause — you’re selling Ghana to investors, making them aware of the opportunities, and this is how you can get that value; through this IPO,” Mr. Adu Boahen said.