Agricultural Development Bank (adb) has signed a Memorandum of Understanding (MoU) with a foreign company known as Atlas Mara Limited for an initial equity investment of $50 million.
This is contrary to earlier assertions by the bank that it will not have foreigners or foreign companies either participate or own shares in the bank’s quest to raise funds through an Initial Public Offer (IPO).
The MoU was which was signed on June 4, 2015 by the Managing Director of adb, Stephen Kpordzih and Head of Corporate Development for Atlas Mara limited, Kenory Dowers, had the adb’s board secretary and vice president of Atlas Mara Limited as witnesses.
[contextly_sidebar id=”BNpYKLcc52iXervfOJi3nUovEkoCVKxQ”]Under the terms of the agreement, Atlas Mara is to be given ordinary shares to the tune of 25% of adb as part of the IPO.
According to documents cited by Citi Business News, Atlas Mara is demanding consent rights over board appointments, CEO appointments, adb’s yearly budget, among others.
According to the contract, Atlas Mara shall pay a subscription price per share that represents a valuation of 1.2 times (applied multiple) adb’s audited 31 December 2014 net book value (GHC343, 815,000) in pursuant to the IPO result in a price per share GHC 2.65 pesewas.
In addition, adb shall fully indentify Atlas Mara for treasury related losses which would include direct trading losses, losses stemming from having to close certain unwanted or reported positions and losses related to adjusting the liquidity profile should this be required due to inaccurate reporting identified within 12 months after the completion date of this agreement which is August 1, 2015.
Atlas Mara is further demanding that the board of adb has a maximum ceiling of 11 members and any shareholder with 10% shareholding reserves the right to appoint a member to the board.
This gives Atlas Mara the right to appoint 2 members of the board who according to clause 12 of the MoU are to represent Atlas Mara on the Audit and Compliance, Governance and Risk Management, Credit and Remuneration Committees
Though adb intends to select other investors to participate in the transaction, being Norfund, a Norwegian Development Fund for developing countries and a group of local investors; this will be subject to the acceptance of Atlas Mara Limited.
Meanwhile according to clause 16 of the MoU, Atlas Mara will have the consent rights to appoint the CEO and Executive Committee Members of adb.
It will also have the power to compensate Executive Committee Members, employees, appoint and or remove any member of the board of directors.
It will also have the right to distribute dividends, divest or acquire assets or subsidiaries worth more than $2million and approve the bank’s annual budget.
Atlas Mara Limitedl a $1bn conglomerate with business in 19 African countries was founded by the former chief executive officer of Barclays bank, Bob Diamond and 32-year-old Ugandan businessman based in Dubai Ashish Thakkar, in 2014.
It has the former CEO of Ecobank Arnold Ekpe as its chairman.
Atlas Mara has interests in banks operating in Nigeria, Botswana, Zimbabwe, Tanzania, Zambia, Mozambique and Rwanda.
Bob Diamond together with Ashish Thakkar incorporated Atlas Mara in the British Virgin Islands.
That location means Atlas Mara’s holding company’s operations aren’t supervised by any financial regulator and it isn’t subject to many of the U.K. rules that apply to British companies. However the banks in which it is invested are supervised by local regulators. The vehicle, listed on the London Stock Exchange, has raised a total of $625 million from investors, including big names such as Janus Capital Management LLC and Wellington Management Co. Atlas Mara has a “standard” listing in London,which is subject to fewer rules and disclosure than marquee companies.
Mr. Diamond has a 3.76% stake in Atlas Mara and sits on its board.
He doesn’t have an executive role, but he helps the vehicle raise money, meets with investors and advises on strategy.
The group controls total assets of about $2.6 billion.
Atlas Mara Ltd this year announced it is building a premier sub-Saharan African financial institution by making a number of acquisitions to establish our geographic footprint, then will integrate and grow those acquisitions.”
By: Norvan Acquah – Hayford/citifmonline.com/Ghana