Energy Bank IPO flops, shareholders turn to private placement to recapitalise
The Energy Commercial Bank Limited (ECB) has been unable to sell enough shares to investors to enable it to recapitalise and also list on the Ghana Stock Exchange (GSE).
The bank failed to raise a minimum of GH¢68 million, which was required to make the initial public offer (IPO) successful.
In total, the bank was hoping to raise GH¢340 million through the sale of 261.54 million shares to new and existing shareholders.
The funds were primarily to be used to recapitalise the bank.
In a release sent to the public through the GSE, ECB, whose majority shareholder is based in Nigeria, said the bank “is raising the required capital to meet BoG’s minimum capital requirement from potential investors through a private placement.”
Consequently, the bank said refunds will be done to all applicants.
“The minimum amount to make the offer successful was not raised and, therefore, refunds will be made to all applicants.
“Applicants are advised to contact receiving agents or receiving banks where they applied for shares in the offer to receive their refund.
Energy Bank, in October this year, launched an IPO to raise a total of GH¢340 million to soar up its capital ahead of the Bank of Ghana’s December 2018 dateline for banks to recapitalise to GH¢400 million.
The offer priced a share at GH¢1.3 and was initially meant to end on November 2 but extended to 16, ostensibly to attract more applicants.
IC Securities were the transaction advisers.
Global Fleet Oil & Gas, Nigeria, currently holds 70 per cent of the bank, leaving the remaining 20 per cent and 10 per cent stakes for Global Fleet, UK, and Nicon Insurance of Nigeria respectively.
Capital deficit
Incorporated in 2009, ECB began full operations in February 2011 as Energy Bank Ghana Limited.
It was, however, rebranded to Energy Commercial Bank in October 2017 to reflect its desire to offer full banking services to retail, commercial and corporate customers.
Its 2017 audited financial statement showed that the bank has GH¢60 million in stated capital and a deficit of GH¢1.08 million in the surplus income account after provisions for statutory, credit risk and other reserves required by the central bank.
This leaves a capital deficit of GH¢340 million, when compared against BoG’s capital demand of GH¢400 million.
Below is the statement from the bank
ENERGY COMMERCIAL BANK LIMITED INITIAL PUBLIC OFFER – REFUNDS TO THE PUBLIC Accra, 06 December 2018 – Energy Commercial Bank Limited (“ECBL” or the “Bank”) announces the refund of all applications made for the purchase of shares in Energy Commercial Bank Limited’s IPO (“ECBL IPO”).
The ECBL IPO consisted of an offer for subscription of 261,538,462 new ordinary shares of Energy Commercial Bank Limited to raise GHS 340,000,000 on the main board of the Ghana Stock Exchange (“the Offer”).
The minimum amount to be raised for the Offer to be declared successful was GHS 68,000,000.
In the event that this amount was not obtained, then all monies paid for ECBL shares under the Offer are to be returned to the receiving banks and receiving agents for onward distribution to applicants after the Offer period has ended, as stated under paragraph 1.7 of the Offer document and in accordance with section 284 of the Companies Act, 1963 (Act 17).
The minimum amount to make the Offer successful was not raised and therefore refunds will be made to all applicants. Applicants are advised to contact receiving agents or receiving banks where they applied for shares in the Offer to receive their refund.
Applicants should ensure that they have proof of their application (e.g. receipt) and proof of identification when they contact the respective receiving agents or receiving banks.
Refunds will be available at the registered offices or branches of the respective receiving agents and receiving banks from 14 December 2018. Energy Commercial Bank Limited is raising the required capital to meet Bank of Ghana’s minimum capital requirement from potential investors through a private placement. ISSUED BY ENERGY COMMERCIAL BANK LIMITED.
source: Graphic Online