ETI launches Africa's biggest public offer

Story: Boahene Asamoah & Gifty Appiah

ECOBANK Transnational Incorporated (ETI), yesterday launched Africa’s biggest rights issue and public offer to raise $2.5 billion for its expansion programme.
The landmark transaction in the history of Africa share offer and rights issue was simultaneously launched in 25 African countries and is also the first-ever cross-boarder transactions on three stock exchanges in Africa.
These are the Ghana Stock Exchange, the Nigeria Stock Exchange and BRVM of Cote d’Ivoire.
The transaction consists of $1 billion rights issue and $1.5 billion offer for subscription.
This constitutes a rights issue of 3,763,759,981 shares at $0.27 per share, which constitute 40 per cent or $1 billion, while the remaining $1.5 billion would be raised through an offer for subscription at $0.29 per share.
Launching the prospectus of the offers in Accra, President John Agyekum Kufuor in a speech read on his behalf by the Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, acknowledged the immense contribution of the banking sector to the development of the economy.
“Government is proud to be associated with Ecobank as it continually seeks to contribute to employment in the country by positioning strategic affiliates in Ghana notably the EB-Accion, which is dedicated to micro finance, Ecobank Development Corporation which is the regional investment wing of the whole group and Ecobank Ghana which is a universal bank with a special focus on retail banking,” President Kufuor stated.
President Kufuor also acknowledged the establishment of the bank’s shared services centre in Ghana to process all the back office activities of the 25 countries in which the bank operates.
He assured the banking industry that the government was committed to the development of the capital market in the country, alluding to the listing of SIC and GOIL to underscore the government’s commitment.
“Government intends to continually improve the economic environment to enable the banking sector to thrive and thereby improve funding to the private the sector substantially,” President Kufuor stated.
The Managing Director of Ecobank Development Corporation (EDC), lead managers of the transaction, Mr Mike Ashong, who gave an overview of the offer, stated that the bank sought to raise $500 million from the debt market in addition to the $2.5 billion to be raised on the capital market.
He said the transaction was a landmark one, being the first company to list on the three regional markets in West Africa.
Mr Ashong said the company had satisfied all the regulatory requirements from the three stock exchanges, as well as other regulators, and assured investors of value for their money should they invest in the company.
He said 52 per cent of the amount to be raised, which is $1.4 billion, would be used to capitalise existing subsidiaries, adding that “it is the vision of the bank to be among the first three banks in each market we operate”.
The remaining amount, he said, would go into acquisitions and branch expansion into new markets, and upgrade the groups technology.
The Managing Director of Ecobank Ghana Limited, Mr Samuel Ashitey Adjei, stated that the bank was committed to Africa hence its strategy to expand its operations to other parts on the continent.
Shareholders at the annual general meeting held in Accra early this year approved the board decision to raise $3 billion to finance its expansion programme, as well as capitalise some of its operations in Accra.
The bank currently operates in 25 countries and has targeted 22 more countries in central and southern Africa.
The rights issue and the public offer are at discounts of 20 per cent and 12.5 per cent respectively over a period of six weeks.
Ecobank Nigeria Plc, Stanbic IBTC Bank Plc and CIMG Securities Limited are joint issuing houses to the offer in Nigeria, while Ecobank Development Corporation (EDC) and First Africa SA (Pty) Limited are the financial advisers to the offer in all the three markets.