Republic Bank begins renounceable rights issue to raise minimum capital

BY: Graphic.com.gh
Mr. Anthony Jordan, Managing Director of Republic Bank Ghana
Mr. Anthony Jordan, Managing Director of Republic Bank Ghana

Republic Bank, a member of Republic Financial Holdings Limited (RFHL) of Trinidad and Tobago, Monday announced it has begun its renounceable rights issue through the Ghana Stock Exhange.

The purpose of the Rights Issue spanning July 23 to August 10, 2018, is to enable the bank meet the regulatory minimum capital requirement, develop and grow its business and undertake larger volume transactions in line with its growth and competitive strategy.

The Offer will also further improve the bank’s single obligor limits (the maximum amount a bank is allowed to lend a single borrower or an individual in relation to its total shareholders fund) and enable Republic Bank to better serve the needs of its clients in a competitive environment.

A statement issued by the bank said an improved single obligor limit will enable the Republic Bank implement and achieve its growth and competitive strategy and therefore improve its market share.

Read also: Bank of Ghana stands by recapitalisation deadline

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The statement attributed to the Managing Director of the Bank, Mr. Anthony Jordan, quotes him as saying the decision on the Rights Issue was arrived at the 27th Annual General Meeting of the Bank held at the Accra City Hotel, on 26th April, 2018 when shareholders approved, amongst others, a resolution to issue additional shares through a renounceable rights issue to raise up to GHS 255,000,000 (Two Hundred and Fifty-Five Million Ghana Cedis) in accordance with the regulations of the bank, the Companies Act, and other relevant laws and regulations and subject to prior approval by the GSE and SEC.

“The Offer comprises a renounceable Rights Issue of 463,636,366 new ordinary shares at GHS 0.55 per share to Qualifying Shareholders in a ratio of one new share for every 0.8376 existing ordinary share held. The Offer is priced at GHS 0.55 per share, representing a 63% discount to the current market price of GHS 1.50 (July 20, 2018) or a 57.5% discount to the three-month average share price of One Ghana Cedis, Twenty-Nine Ghana Pesewas (GHS 1.29.).”

It said in October 2017, the bank had a successful rights issue by raising additional GHS50 million to bring its capital to GHS146 million.

In April 2018, HFC rebranded to Republic Bank Ghana in line with its parent company’s brand name.