... as gov’t remains undecided on the bank’s right issue The sale of Ghana Commercial Bank (GCB) still looms as government is undecided on the right issue by the bank. GCB intends to launch a right issue shortly to raise some 450 billion cedis through the sale of additional 75 million ordinary shares at six thousand (6,000) cedis per share.

The right issue which is currently awaiting approval by the Ghana Stock Exchange allows existing shareholders to buy additional shares in the country’s largest bank. Shareholders however have the option to reject the offer if they do not want to  buy any more shares in the bank.

The same situation applies to government who currently is the single largest shareholder of GCB, wielding some 32 percent shares in the bank. If government fails to subscribe to the additional shares, it will reduce its shares and influence on the bank. It will also be a major indicator to the possibility of government abandoning the idea of selling its stake in the bank to a strategic investor.

On the hand if government goes ahead to subscribe to the right issue, it will mean that government is still interested in holding to a significant percentage of the  bank’s share which it could sell to a strategic investor who automatically will take controlling stake in the bank after a compulsory tender offer.

Government does not appear decided on the matter, with Finance Minister Kwadwo Baah Wiredu confirming to JoyFM that they are still considering the various options. Government’s final decision will made known when the decision is taken.

Mr. Baah Wiredu’s response is not too comfortable to the top management of the bank because it is a signal to the fact that government has not abandoned the idea of selling its stake in the bank to a strategic investor who will take over the management of GCB.

Those who are against a strategic investor for GCB are only hoping that government will not take up the right issue which will result in a significant reduction in its shares. If government’s shares falls below 25 percent, it is going to be more difficult though not impossible to bring in a strategic investor.

Financial experts such as Databank’s Daniel Ogbamey- Tetteh has argued that a decision by government to raise money to buy into the right issue will be a clear pointer to the fact that it still wants to revisit its policy of selling the bank to a strategic investor.

Mr. Ogbamey- Tetteh however explains that even if government refuses to subscribe to the right issue it does not close the chapter on a strategic investor taking over the bank.

This is because an investor could be brought in and assisted by a brokerage company to buy shares of some other shareholders at a premium to become a significant shareholder and then continue till it gets a controlling stake and take over the management of the bank.

He however adds that the procedure is rather lengthy and more cumbersome. For now, all eyes are on government for the next couple of weeks as it decides whether it intends to buy the additional shares or whether it will renounce the offer and explanations it will advance for whatever decision it takes.