Ghana IPOs at Risk as March Sale Leaves Buyers Empty-Handed

ACCRA, Ghana, South Africa, Capital Markets in Africa — A delay in completing the sale of Ghana’s Agricultural Development Bank Ltd., the nation’s biggest initial public offering yet, may dent confidence in future share sales, according to FirstBanc Financial Services Ltd.

Investors who bought into the 450 million cedis ($118 million) sale in March, which was oversubscribed, are still waiting for their shares after the owners — the Bank of Ghana and the Ministry of Finance — missed an April 11 deadline to sign off on the deal. The nation’s Securities and Exchange Commission extended the deadline to Thursday, failing which investors may have to be repaid.

“We’re still waiting for the shareholders to give their final approval of the results,” Solomon Atefoe, a spokesman for ADB, said by phone on Thursday. “It is not true that the bank will list today,” as reported in a local newspaper.

The Ghana Stock Exchange has been looking to the sale to encourage others to list and boost sagging trading volume. The exchange’s index fell into a bear market earlier this year.

 “The old man or old woman who walked to my office and asked me to buy shares is going to have a problem the next time I tell her there’s an IPO or rights issue and I’m taking money to buy on her behalf,” Benjamin Amoah-Adjei, an Accra-based stock analyst at FirstBanc, said in an interview. “It is bad for confidence in the market.”

Finance Minister Seth Terkper didn’t answer two phone calls to his mobile phone on Wednesday. He didn’t reply to a text message seeking comment. The government will remain the largest shareholder in ADB after the listing, Atefoe said, without disclosing the size of its holding.

The sale of the bank would have seen its shares start trading on April 25, according to the initial timetable. The IPO was postponed twice last year due to a labor dispute and a court order. The lender, owned 52 percent by the government and 48 percent by the central bank, has been slowed by lawsuits, protests from employees and government infighting since it was first proposed in 2012.

“Clients call several times a week,” to ask whether their investment has been allotted since the April deadline,  Amoah-Adjei said. “It’s annoying.”