Investors Angry Over ADB IPO Delay

Investors have expressed worry about further delays in the listing of Agricultural Development Bank (ADB) on the Ghana Stock Exchange (GSE) following a suspension by the Securities and Exchange Commission (SEC), who is investigating a petition from ADB.

What is baffling the investors is that SEC did not disclose the contents of the petition that warrants the investigations.

This development has further heightened the worries of investors whose monies had been locked up since June 2015 when the IPO was opened.

The question bothering many of the investors is, after going through a successful offer period which led to the oversubscription, why is the bank still not listed on the Stock Exchange?

The investors, who bought into the GH₵450-million sale in March, which was oversubscribed, are still waiting for their shares.

Only 2.7% of the 70% shares of ADB put on sale have been bought at advertised offer price of GH₵2.65 while 67.3% of shares were being requested at GH₵2 per share.

The investors say if they had invested their money in other instruments, it would have accrued reasonable interest for them by now.

Some members of the investor community believe the delay may dent confidence in future share sales in Ghana.

The investors are asking why no reason has been given to them regarding the delays in listing after the IPO was declared successful.

The GSE has been anxiously expecting the listing of ADB to encourage others to list and boost falling trading volumes.

ADB is 100% owned by the Government of Ghana. The offer price per the prospectus is GH₵2.65 per share.

The sale of the bank would have seen its shares start trading on April 25, according to the initial timetable. 

SEC extended it to May 5, 2016, but it was also missed because the board of the bank failed to approve the offer results submitted by the Financial Advisor and lead sponsoring broker, IC Securities. 

Sources say the government will remain the largest shareholder in ADB after the listing.

The IPO has been slowed by lawsuits and protests from employees since it was first proposed in 2012.

After all issues were resolved, the IPO reopened on Dec 23, 2015, with closure on February 26, 2016

Two weeks before closure, the offer was extended for another four weeks to now close March 24, 2016.

After closure of offer on March 24, 2016, ADB board recommended the offer results to the Minister of Finance for approval.

The bank, in its IPO, targeted to raise a maximum of GH₵400m but received subscriptions of GH₵450m.

Institutional/corporate subscriptions accounted for 75% while retail subscriptions make up the remaining 25%.

The listing will allow ADB to expand its customer base and give Ghanaians a sense of ownership while significantly increasing its equity base.

Industry watchers commended government for taking the bold decision to let go of its shares in ADB.

The bold initiative falls in line with calls by economic analysts that government should divest its stakes in state-owned enterprises through the stock market to deepen the market and broaden the local investor base.

ADB set out to raise GH₵300m, with room for an additional GH₵100m, to make the final amount GH₵400m.

Therefore, after completion of allotments totalling GH₵400m, the remaining GH₵40m will be returned to unsuccessful applicants.

ADB will utilise GH₵300m while GH₵100m will go to the Bank of Ghana (BoG) and the Government of Ghana.   

The amount raised from the IPO would enable the bank to meet its regulatory capital requirement, as well as help ADB get back on a solid footing.

A total of 74,888,369 shares belonging to the Bank of Ghana were sold while another set of 75,471,698 new shares from the bank proper were also sold at a share price of GH₵2.65.