Ghana | More Delays in Store for Ghana’s Biggest IPO as Fund Seeks Stake

ACCRA, Ghana, Capital Markets in Africa: Ghana’s state pension fund said it may seek a stake in Agricultural Development Bank of Ghana Ltd. more than a month after the nation’s biggest-ever initial public offering closed, a move that may further delay completion of the deal.

Social Security and National Insurance Trust, the nation’s biggest investor, which oversees about $1.7 billion, is reviewing the IPO prospectus and will decide in about two weeks whether to apply for shares, Noel Addo, general manager for investment and development, said in a telephone interview on Wednesday. SSNIT didn’t bid for stock in the IPO, which closed in March and raised 450 million cedis ($118 million).

The IPO, Ghana’s first in two years, had been delayed by lawsuits, protests from employees and government infighting since it was first proposed in 2012. It is now again at risk after the government, which owned 52 percent and will remain the largest shareholder, and the central bank, which owned the rest, missed an April 11 deadline to sign off on the deal, preventing the shares from starting to trade on the stock exchange.  

“There were so many hiccups, today it’s listing, tomorrow it’s postponed, so as a matter of fact when it was actually on we were not sure it was on, and on for good,” Addo said. “When we heard that the offer was closed and it was successful, that was when we said why don’t we look at the ADB transaction all over again.”

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

If the pension fund’s board approves a bid for shares, it would seek a stake “that will enable us to have a say in the overall strategic policy direction of the bank,” Addo said. “We are reviewing the prospectus in the context of the overall effect on our portfolio to enable us to arrive at a decision to buy or not.”