GAT Acquires 18% Shares In ADB

The Ghana Amalgamated Trust (GAT) has acquired 18% shares in the Agricultural Development Bank (ADB), a statement from its Managers has said.

It happened after GAT successfully injected Ghc127million into ADB in a private placement arrangement.

According to the statement, the transaction happened on the 14th of January 2020.

ADB’s operating capital, the statement said, has since been boosted to Ghc700million, almost twice the Ghc400million that the new minimum capital requirement regime for banks preconditions.

Observers are however wondering where GAT got the money from to buy the shares in ADB, which is one of five banks that the Special Purpose Vehicle was formed to basically baby-sit.

This is because the Finance Ministry, which had given GAT up to March 2019 to source funding for ADB and four other banks, was forced to abandon an attempt to use GoG Sovereign Guarantee to raise the money.

Hon. Isaac Adongo, the MP for Bolgatanga Central who had sued the Ministry on grounds that in law the Ministry cannot use borrowed money to buy shares in a bank got an easily victory.

Finance Minister Ken Ofori-Atta had quickly reverted to Parliament with a request that government be allowed to directly raise the cash from the money market and then use GAT as a conduit to pump the money into the banks.

It is not clear what the status of that project is in the wake of GAT acquiring 18% shares in ADB. It is also not clear what the plan for the four other banks – NIB UMB, Prudential Bank and Omni/BSIC bank – is, given that GAT had a deadline of March 2019 to find funding for them.

These banks were put under the care of GAT as part of the banking sector clean up in 2018. they were described as banks which were well managed but did not have the requisite capital to meet the new banking sector minimum capital requirement which had been hiked from Ghc120million to Ghc400million.

GAT as a special purpose vehicle was therefore set up to source the necessary capital to inject into them.

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