Business News of Thursday, 20 December 2018
The Bank of Ghana (BoG) has endorsed the decision by the Agricultural Development Bank (ADB) to convert debt of GHc150 million to equity shares to help meet the minimum capital requirement.
Shareholders of the Bank at an extraordinary meeting in Accra approved the deal after a short presentation from the Board Chairman, Alex Benasko.
Speaking at the meeting, Mr Benasko confirmed that the BoG raised no objection to the move after shareholders’ approval.
“The most important thing is to get the shareholders’ approval for this move because the Bank of Ghana has given its consent and awaiting the Bank [ADB] to approve through its shareholders.
This will also mean that the current ownership structure of the bank will change after all the necessary documentations are done” he said.
The largest majority shareholder of ADB is the Bank of Ghana through its representative, the Financial Investment Trust with 60.5 per cent.
The Government of Ghana with 32.30 per cent and 7.20 per cent for other shareholders.
Mr Benasko assured that the new development will open opportunity for the bank to finance high projects and also increase its support to the Agricultural sector which is supposed to be its mandate as an agric focused bank.
“We will be able to expand more and also increase financial support to the Agricultural sector which has been our main focus,” he noted.
As of December 2017, the Bank’s capital stood at approximately GHc275 million but has been impaired by a negative income surplus of about GHC166 million as of September 2018 according to its unaudited account.
The Board of Directors recommended a right issue to enable all existing shareholders to participate whiles maintaining their shareholding without being diluted.
The shares to be issued are expected to be listed on the Ghana Stock Exchange subject to regulatory approval from the Securities and Exchange Commission.