Republic taking it slow in Ghana
Sunday, August 04 2013 @ 03:20 PM AST
Contributed by: michaelariston
Though actions, like buying just enough shares to trigger an SEC order to make a takeover bid and buying the Abraaj Group's stake thereafter, suggest that Republic Bank Limited (RBL) does in fact want to acquire Ghana's HFC Bank now, the latest news report out of Ghana quotes an HFC bank official as saying that RBL actually wants to take it slow.
The following is the full report from GhanaWeb.
Republic Bank Limited of Trinidad and Tobago, which has acquired a majority stake in HFC Bank Limited, has indicated that it is prepared to make an offer for all the remaining shares in HFC if it is mandated to do so.
“Republic Bank continues at this time to engage in discussions with the SEC and the Bank of Ghana regarding the possibility of a waiver of the mandatory offer, but is prepared and able to make an offer for all of the remaining shares in HFC Bank should it be mandated to do so by the regulators,” said a statement issued by the company and signed by Mr. Robert Le Hunte, Country Manager for Ghana and sub-Saharan Africa.
After increasing its shareholding in HFC to 32.02 percent earlier this year, Republic Bank was required by Securities and Exchange Commission (SEC) rules to make a mandatory offer to take over the local bank. Republic, however, asked SEC to grant it a waiver.
While SEC has declined the request, necessitating the take-over of HFC, the Bank of Ghana, citing the strategic importance of HFC in the construction industry and the possible reaction of the public, wants Republic Bank to acquire up to a 40 percent stake within the next 12 months -- pitching the banking industry regulator against the SEC.
The Bank of Ghana and SEC are presently in consultations about the way forward in light of the recent developments, according to SEC boss Adu Anane Antwi.
“Our position is that they must make a mandatory offer, but the BoG says it may raise some concerns. Our rules are our rules, but they also think this will affect the banking industry. So we are still talking,” he told the B&FT in an interview.
Speaking to the B&FT on why Republic Bank applied for exemption from SEC, Charles Acquah, Executive Director for Business Development and Marketing of HFC Bank, said: “Because Republic Bank is new in the country, it doesn’t think it will be in its interest -- or that of HFC -- to do the takeover bit.
“They would like to start gradually before taking more shares. What the SEC says they should do, the Central bank says it will not approve.”
He said, with HFC, business is going on smoothly and everything is normal.
Meanwhile, the Abraaj Group in a statement released on Wednesday said it has sold its stake in HFC Bank to Republic Bank -- without giving details of the value of the transaction.
“Our investment in HFC was well-timed, as we capitalised on the rapid growth in the banking sector in Ghana,” said the statement.
Republic Bank said it is aiming to replicate its success in financing and playing a significant role in Trinidad and Tobago’s oil and gas sector -- as well as the mortgage market -- in Ghana.
“Republic Bank's collaboration with HFC has from inception been cordial and open, and continues to be so as it seeks to add value to the latter bank's offerings and ability to serve the needs of the Ghanaian public. Republic Bank has a proud legacy of service in all markets which it serves, and every acquisition and merger in which it has engaged has created value for all stakeholders -- including its customers and the people of the respective countries,” the bank said.
“[The bank’s] mortgage portfolio currently stands at more than US$600-million in Trinidad and Tobago alone. Republic Bank intends to use its vast expertise in this area to enhance the mortgage offerings of HFC, and help to grow that bank's base to the benefit of the home-owning public in Ghana.”
- Story http://ghanaweb.com/GhanaHomePage/bus...?ID=281422
- Photos http://www.hfcbank.com.gh/Media-Gallery.aspx