Stanbic offers $80 million for ADB

Stanbic Bank has made an audacious bid of US$80 million to take over the nation's only Agricultural Development Bank (ADB), says the Ghanaian Observer newspaper.

The development has led to angst within the ranks at the Pegasus House head office of ADB and its branches nationwide.

The GO states that rumours of the bid gained currency last year which fact resulted in its undercover investigation. It said that culminated in a comment by Finance Minister Kwadwo Baah-Wiredu that Stanbic Bank had indeed made an offer to buy ADB. He told GO then that the offer was being studied by the Bank of Ghana which is part owner of ADB.

ADB staff was expected to hold a meeting on Wednesday at their Cedi House offices with their management to find out what really is happening.

Details of the Stanbic Bank offer for ADB made available to GO include the fact that Stanbic wants an outright buy-out of the Government of Ghana and BoG whose equity holdings are 52% and 48% respectively.

Sources say the ADB workers, apart from being dead set against the Stanbic offer are even miffed by the fact that Stanbic reportedly made an original offer of US$120 million which has all of a sudden reduced to US$80 million.

The workers are also charging that any decision by Government and BoG to off-load their equity or controlling interests in the bank to Stanbic or any other financial concern will not be in the national interest, especially that of farmers and the agricultural sector of the nation.

The concerns of the ADB staff about the Stanbic Bank offer and the concerns of other well meaning players in the financial industry has certainly reached Government. In yesterday's issue of the state-owned Daily Graphic, a Deputy Minister of Finance, Prof. George Gyan-Baffour was quoted as saying in a statement that Government has not sold its shares in ADB to Stanbic Bank.

He is also quoted as saying that the Government received an 'unsolicited proposal' from Stanbic Bank in respect of ADB sometime last year.

Meanwhile GO has picked up details of securitisation proposals ABD received in the last quarter of 2006 and January this year from reputable financial houses like Merril Lynch and BNP Paribas Securitisation Department.

UK-based BNP Paribas's securitisation offer to ADB is in partnership with Inter-Afrique Holdings Ltd of Ghana whereas US-based Merril Lynch's proposals are in partnership with Databank.

Merril Lynch proposes to act as structuring advisor and lead manager for a debut of US$150-200 million Worker Remittances Securitisation Programme whilst BNP Paribas proposal is to act as transaction advisor to ADB in securitisation, new product development and investment and financial advisers.

Financial market analysts say these proposals represent an unprecedented show of faith and confidence in the strides made by ADB over the years using 100 per cent Ghanaian expertise.

The proposals from Merrill Lynch and BNP Paribas, according to industry watchers is based on the fact that over the last 10 years, inward remittances through Western Union has been a significant source of external foreign exchange flow and revenue for ADB.

Already, fingers are pointing at the 'Bretton Woods guys' - the IMF and the World Bank as being behind the reasons why the Bank of Ghana is keen on giving up its 48 per cent equity holding in ADB.

BoG has apparently been smarting under pressure from the Bretton Woods guys that it cannot be both a player and a regulator of the nation's financial market and so must give up all its equity holdings, to enable it remain a true regulator.

It is this decision, financial market watchers say, which has resulted in the BoG setting up a subsidiary Financial Investment Trust (FIT) which holds its 48 per cent equity in ADB.

Credit: Ghanaian Observer