Ghanaian Bank CalBank Suspends $42.9 Million Rights Issue

CalBank, a commercial bank partially owned by Daniel Ofori, a Ghanaian billionaire and the richest investor on the Ghana Stock Exchange, has halted its planned GHS600 million ($42.9 million) rights issue after a minority shareholder sought an injunction.

The sudden action follows weeks of expectation for the capital raise program. Minority shareholders filed an injunction against the allotment of shares, leading to the suspension, as announced on May 14 by the Ghana Stock Exchange (GSE). Court hearings are set to begin this week.

CalBank acknowledged the interruption created by the order and affirmed the temporary halt of remaining capital raise activities, including share allotment. They are aggressively working with regulators, particularly the Securities and Exchange Commission, to reach a quick resolution.

In late March, the Accra-based lender offered existing shareholders the option to purchase additional shares at a fixed price of GHS0.29 per share, with the goal of raising GHS600 million and improving its tier-1 capital adequacy ratio.

The fundraising drive, however, has raised investor concerns. Some minority shareholders believe the rights offer dilutes their ownership interest, potentially reducing their influence over the bank.

CalBank has confirmed a temporary halt to the share distribution process following a court injunction motion filed by a minority shareholder group. Hearings and filings are slated to begin in mid-May, followed by a court judgment on the injunction. The bank will provide an update after the court’s decision.

CalBank, founded in 1990, serves a wide clientele that includes companies, high-net-worth individuals, non-governmental organizations (NGOs), small and medium-sized enterprises (SMEs), and retail clients. Daniel Ofori, a prominent Ghanaian businessman, owns a 3.9% share in the bank.

Daniel Ofori founded Ghana’s premier garment retailer, White Chapel Ltd., and currently serves as chairman and CEO of the parent firm, White Chapel Holdings. In addition, he serves on the boards of several additional companies.

The injunction request reflects minority shareholders’ determination to protect their interests and ensure a fair and transparent capital-raising process.

Analysts, investors, regulators, and the Ghanaian banking sector are closely monitoring events. CalBank’s response to the injunction will be important in restoring investor confidence and ensuring stability for future expansion.

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