UniBank Clarifies MD After Confusion Over Ghana Bank Deal

ACCRA (Capital Markets in Africa) – UniBank Ghana Ltd. said it is not buying the country’s Agricultural Development Bank Ltd. as it clarified comments by its top executive on Wednesday that were interpreted even by regulators as a takeover offer.

UniBank Managing Director Kwabena Duffuor told an Accra-based radio station that Belstar Capital Ltd. is leading a group of shareholders who have pledged to sell 53 percent of their holdings in ADB, as the agricultural lender is known, to his institution. UniBank’s announcement spurred the Ghana Stock Exchange to suspend trading in ADB’s shares to allow the bourse time to get clarity on the matter, before lifting the embargo on Thursday.

“The pledge by members of the Belstar-led consortium does not constitute a sale of shares to UniBank,” Duffuor said in a statement on Thursday. The group also included Starmount Development Co., which holds 11 percent of ADB, and SIC-Financial Services Ltd., which owns 10 percent. Belstar owns 24 percent of ADB.

UniBank in November reached an agreement with the group of investors to sell their entire holdings in ADB and invest the proceeds in UniBank, giving them a stake and injecting at least 600 million cedis ($135 million) of cash into the bank, the MD said. Delays around the implementation of the deal resulted in the Belstar-consortium pledging their stock in ADB “to ensure that the transaction will be consummated,” and to show their commitment to the capital-raising process, Duffuor said.

Bank of Ghana Governor Ernest Addison said on Wednesday that the institution hasn’t approved a takeover of ADB or any transfer of shares. UniBank is seeking to raise capital as lenders in Ghana scurry to meet an end-of-the-year deadline to bolster their capital buffers. The new rules are part of a government effort to create stronger banks better able to support economic growth by financing more projects.

“A pledge does not have the effect of the transfer of ownership,” ADB said in a statement on Thursday. “ADB therefore assures its shareholders and the general investing public that the shareholding of the bank remains unchanged.