HFC set to raise GH¢255m in rights issue …sets April 24 for rebranding

HFC Bank has given indication it will raise an additional GH¢255million through a renounceable rights issue, in a bid to meet the GH¢400million new minimum capital requirement.

The bank raised GH¢50million in a similar fashion in November 2017 to meet the then-minimum capital requirement of GH¢120million; and according to its Managing Director, Anthony Jordan, it hopes to meet the new minimum capital even before the December 2018 deadline.

Speaking to B&FT at a breakfast meeting in Accra, Anthony Jordan said the bank is committed to meeting the new minimum capital requirement set by the central bank, hence the move to raise money on the Ghana Stock Exchange (GSE) through the renounceable rights issue.

“We had a successful rights issue of GH¢50million last year, and we will meet the new minimum capital requirement by going back to the GSE to issue an additional GH¢255million before close of the year. I must say that our shareholders have given us the assurance that they will recapitalise the bank through the rights issue.”

Mr. Jordan also said the move will improve the bank’s single obligor limits and also enable it to better serve the needs of its customers in a competitive environment.

“The two main majority shareholders [Republic Bank Financial Holding and SSNIT] have promised to take up all the shares and are also prepared to take up additional shares of any minority shareholder who is not able to purchase the shares.”

Accordingly, the board of directors of the HFC Bank Ghana Ltd. opted for an equity capital raised through the renounceable rights issue to enable all shareholders participate on an equal basis in the bank’s growth agenda, and also create an opportunity for shareholders to maintain their shareholding without being diluted by an alternative route to a capital raise, Mr. Jordan said.

Rebranding

He also disclosed the bank’s rebranding, which will result its name being changed to Republic Bank Ghana Limited – slated to happen on April 24, 2018.

The rebranding comes after shareholders gave approval for the board to change the bank’s name from HFC Bank to Republic Bank Ghana Limited, at the last Annual General Meeting of shareholders in September 2017.

The name-change, Mr. Jordan said, will bring focus to the bank’s new image and support staff to live the new culture that has been introduced in alignment with the group’s culture and core values.

In May, 2015, Republic Bank Limited became the majority shareholder in HFC Bank with almost 58% equity stake, following closure of the mandatory tender offer to shareholders and subsequent approval by the Securities and Exchange Commission (SEC).

“Even though our bank has moved from an initial core business of mortgage to other areas, I can assure you that we still remain in the business of mortgage-financing and we are the most diversified bank in Ghana today,” Anthony Jordan said.