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The Chief Executive officer of the Ghana Amalgamated Trust (GAT), Eric Otoo, says the government-assisted recapitalisation of banks following the banking sector crisis was done on a commercial arm’s length basis.
According to him, the programme was not a clandestine move by the government to acquire controlling stakes in the indigenous banks that had been recapitalised.
He said the GAT had worked independently of government influence with its own board, management and advisors who had been plucked from industry to help the ailing banks.
Speaking on PM Express Business Edition, Eric Otoo further clarified that the banks ahd not been funded using debt but equity.
“What we funded the banks with is actually not debt at all. It was equity. So we negotiated with each bank. So let’s take ADB, for instance, ADB is publicly listed and traded. ADB needed an amount estimated by Bank of Ghana, about 127 million cedis, to be fully recapitalized in 2019.
“So we engaged ADB, we had discussions with the board, with management, ADB had advisors advising them, we had advisors. So everything was done on a commercial arm’s length basis. And we invested equity into ADB. So for our investment into ADB, we negotiated an 11.3% equity stake.
“Yes, so far for ABB here the entire amount we put in was put in as equity, but to clarify further it was put in us ordinary equity. You know equity can come in various forms,” he said.
Incorporated under the Companies Act as a public limited liability company on December 17, 2018, Ghana Amalgamated Trust Plc (GAT) is a special purpose vehicle (SPV) established by the Government of Ghana (GoG) to support selected indigenous banks (ADB, NIB, OmniBSIC, Prudential and UMB) over five years.
Its core mandates are; to raise funds to recapitalize the selected indigenous banks that were unable to meet the new GHS 400 million minimum capital requirement that the Bank of Ghana (BoG) set for universal banks. As part of the recapitalisation, GAT owns equity stakes in the banks that it has invested in.
And also, to support the transformation of the banks to improve governance, management, operations and financial performance to create value for stakeholders.
