Reports have been gathered that, investment firm and owners of Fan Milk International, Abraaj Group, has initiated moves to acquire about 55 percent stake in Agricultural Development Bank (ADB).
Abraaj Group replaces financial firm Atlas Mara Limited which pulled out of the deal recently. Atlas Mara had earlier signed a Memorandum of Understanding (MOU) with adb to invest 50 million dollars in exchange for 25 percent stake of the bank.
Documents cited reveal that Abraaj Group will be acquiring unsubscribed shares during the bank’s Initial Public Offer (IPO). It will also give the bank an undisclosed amount of capital in the form of redeemable convertible loan notes.
Abraaj will pay a subscription price per share of 2 cedis 65 pesewas which will equate to post IPO holding, including the planned 5 percent Employee Share Ownership Plan (ESOP), of at least 49%, corresponding to up to 131,642,882 shares.
Abraaj Group per the deal is also demanding consent rights over board and management appointments among others.
Abraaj Group just like Atlas Mara is demanding consent rights over board and management appointments of the bank.
The investment firm is demanding to have four seats on the bank’s board as well as the right to appoint a Chief Executive Officer, Chief Financial Officer and Chief Operations Officer for the bank when it takes over.
Abraaj is also demanding that the board of ADB Bank has a minimum of 7 members and a maximum of 11 members but any shareholder with 12% shareholding reserves the right to appoint a member to the board.
But unlike Atlas Mara which had the right to appoint 2 members to the board Abraaj is asking for 4 seats and shall have the right to transfer its board seats in connection with transfer securities.
Norfund a Norwegian Development Fund for developing countries is still one of the two investors to participate in the equity investments in ADB.
Abraaj per the contract will also have the power to compensate Executive Committee Members and employees as well as appoint and or remove any member of the board of directors.
Source: Citifmonline