SHAREHOLDERS OF Agriculture Development Bank (ADB) have given their approval for the directors of the bank to undertake a private placement of ordinary shares of the company with Ghana Amalgamated Trust (GAT) Plc for the consideration of GH¢127 million.
The move is to enable ADB increase its stated capital in order to meet the Bank of Ghana’s new minimum capital requirement of GH¢4000,000,000, subject to the applicable regulatory approvals.
The shareholders also authorized the directors of the bank, subject to applicable rules, to determine the terms, timing and pricing of the private placement.
Speaking at the Bank’s Annual General Meeting (AGM) in Accra, Alex Bernasko, Chairman of ADB Board, said the bank recorded a profit-before-tax of GH¢34.0 million in 2018, registering a dip from GH¢47.0 million achieved in 2017.
Currently, the bank’s paid-up capital stands at GH¢258 million.
This was after it applied its negative income surplus of GH¢294.1 million losses to its initial amount of GH¢552.1 million, hence the private placement.
“Now that the shareholders have given the go-ahead for the authorization of GH¢127 million from GAT, we have appointed transaction advisors and we are liaising with them so that we can carve out the best terms and conditions for ADB,” he told journalists.
Mr. Bernasko was optimistic that their advisors would get them a good agreement with GAT. He lamented the huge non-performing loans (NPLs) of the bank some of which he said were in court for recovery.
“If we get at least 50 per cent recovery, we will be able to capitalize without hanging on GAT for so long,” he said.
He expressed the hope that the strategies put in place had set the foundations for better performance, going forward.
“Apart from the growth in our shareholders’ funds from GH¢479 million in 2017 to GH¢639.7 million in 2018 due mainly to injection of new funding all the major indices remained flat. All other indices did not change significantly because of a deliberate policy to go slow and clean the bank’s balance sheet of historical toxic assets,” he added.
Source: Daily Guide
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