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GHC10m Energy Bond high political risk for investors – Adongo

A spokesperson for the Minority on Finance Isaac Adongo has warned investors to be cautious about the 2.5 billion dollar bond floated by the government to offset the Energy Sector debt.

According to him, the process adopted by the government for the bond portends a high risk for investors.

“I want investors to know that this is a political risk. The ESLA PLC that will be used to raise the money is questionable. The ESLA is a political decision. Investors must be made aware of the enormous risk they are taking getting these bonds. IMF is saying that the vehicle doesn’t have a balance sheet to carry its debt,” Adongo told Francis Abban on the Morning Starr Wednesday.

But in a sharp rebuttal, the chairman of the Finance Committee of Parliament Dr. Mark Asibbey Yeboah said the claims by the Minority are unfounded.

According to him, the bond has been oversubscribed because investors have confidence in the approach by government.

“There is some debt in the system and it’s crippling our banks. We have to get rid of the debts. We are issuing the bonds to take off the debts in the Energy sector. Ghc1.2bn a year is what goes into Energy debt recovery. The bond has been oversubscribed, the investors are not stupid. ESLA bill has been passed by Parliament and we cannot do anything about it. The government decides that ESLA levies will come in and bonds will be issued, ESLA will take all the receivables and make necessary payments,” he argued.

Below are details of a statement issued by the fund managers

Notice to Qualified Investors in Ghana in Relation to the Offer and Listing of Bonds of Up to GHS 6 Billion Senior Unsecured Notes Backed by Irrevocable Assignment of EDRL Receipts under a GHS 10 Billion Bond Issuance Programme to Refinance Legacy Energy Sector Debts.

E.S.L.A. Plc (unrated) an independent special purpose company established and sponsored by the Republic of Ghana acting through the Ministry of Finance (rated B3, Stable (Moody’s) / B-, Positive (S&P) / B, Stable (Fitch)), has appointed Standard Chartered Bank, Standard Chartered Bank Ghana Limited and Fidelity Bank Ghana limited to arrange a series of fixed-income investor meetings in London and Accra, commencing on October 19th 2017. Co-Managers on the mandate are Temple Investments and GCB Bank.

New 7 year and 10 year benchmark-sized, nominal fixed-rate GHS-denominated bonds, with payments in GHS, documented under Ghana SEC regulations to be listed and traded on the Ghana Fixed Income Market of the Ghana Stock Exchange will follow, subject to market conditions.

The Representatives for E.S.L.A. Plc will be:

• Mr. Samuel Arkhurst – Non Executive Director and Chief Economics Officer and Director of Debt Management Division,Ministry of Finance
• Mr. Amanor Dodoo–Senior Partner with KPMG (KPMG in Ghana has been appointed as the Administrator of E.S.L.A. Plc)

Representatives for the Republic of Ghana will be:

• Hon. Charles Adu Boahen– Hon. Deputy Minister for Finance,Ministry of Finance

• Hon. Joseph Cudjoe– Hon. Deputy Minister for Energy, Ministry of Energy

• Mrs. Cynthia Arthur – Head, Financing & Investor Relations, Debt Management DivisionMinistry of Finance

• Mr. KwameAdu Okyere-Mensuo- Head Energy Risk Management, Debt Management Division, Ministry of Finance

• Mr. Charles Owusu- Technical Advisor- Energy, Oil & Gas, Ministry of Finance

The Roadshow Schedule will be as Follows:

• Thursday, October 19th: London

• Monday, October 23rd: Accra

• Offer Opens: Week starting October 23rd

Source: Ghana/

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