Ghanaian Chronicle (Accra)
23 September 2008
UT Financial Services has at last launched its eagerly anticipated Initial Public Offer (IPO), to float 90, 293, 3000 ordinary shares, representing 40% shares of the company, on the Ghana Stock Exchange to raise some US$27 million.
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I think of the offer as clever way of shedding off private equity interest to unsuspecting and illiterate ghanaians. As things stand only $3m of the amount raised ($27m) is dedicated to the recapitalization for the much touted expansion of the company
"UT is offering 90,293,000 ordinary shares, at 30Gp per share, to raise GH¢27, 087,900 out of which GH¢3 million would go into recapitalisation, while the remaining GH¢24 million would go into other ventures."
It must be pointed out that the 24m is attributable to the two existing shareholders and the dicision to go into other ventures is outside the jurisdiction of the company.
In a very simple term,the company raised only $3m(.3$ * 10m shares) and the rest constitute equity shedding which would then be loaned out to the company at a very profitable price.With a shareholding of >50% which put the duo in a position to wrap the the company around their fingertips I dont see why they cannot super benefit.
The sale also has tax implication as the security falls to be treated as chargeable asset. IRS take note and notice is hereby served on you.
It is thus erroneouse and misleading to report that the company offerred >90m share for sale. It was no wonder that institutional investors shied away from the offer.