Ghana’s HFC Bank to Raise GH¢255m in Rights Issue

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HFC Bank Ghana says it will raise an additional GH¢255 million through a renounceable rights issue, in a bid to meet the GH¢400 million new minimum capital requirement.

In November 2017, the bank raised GH¢50 million through a similar rights issue to meet the then minimum capital requirement of GH¢120 million; and according to its Managing Director, Anthony Jordan, it hopes to meet the new minimum capital even before the December 2018 deadline.

“We had a successful rights issue of GH¢50 million last year, and we will meet the new minimum capital requirement by going back to the GSE to issue an additional GH¢255 million before close of the year. I must say that our shareholders have given us the assurance that they will recapitalise the bank through the rights issue,” Mr. Jordan said in Accra during a breakfast meeting.

He explained that the bank is committed to meeting the new minimum capital requirement set by the central bank, hence the move to raise money on the Ghana Stock Exchange (GSE) through the renounceable rights issue.

Mr. Jordan further said the move will improve the bank’s single obligor limits and also enable it to better serve the needs of its customers in a competitive environment.

“The two main majority shareholders [Republic Bank Financial Holding and SSNIT] have promised to take up all the shares and are also prepared to take up additional shares of any minority shareholder who is not able to purchase the shares.”

The Board of Directors of the HFC Bank Ghana Ltd. opted for an equity capital raised through the renounceable rights issue to enable all shareholders participate on an equal basis in the bank’s growth agenda, and also create an opportunity for shareholders to maintain their shareholding without being diluted by an alternative route to a capital raise, Mr. Jordan said.

 

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