Fidelity Bank raises US$127.3m in Tier I and II capital
Fidelity Bank Ghana Limited has raised US$127.3 million under its Capital Raising Exercise which seeks to inject more capital into the operations of the bank.
The transaction, which included a tier I and tier II capital raise of USD 67.3 million and USD 60 million, respectively, was approved by the Bank of Ghana (BoG), and that positions Fidelity Bank as one of the best capitalised banks in the Ghanaian banking industry.
A statement issued to the Daily Graphic in Accra said Kagiso Tiso Holdings Proprietary Limited (“KTH”) of South Africa, Amethis Finance (“Amethis”) and Edmond de Rothschild Europportunities Management II (“Rothschild” or “ERES”) of France invested a total of US$7.3 million through a combination of ordinary and preference shares under the tier I capital funding programme.
Following the completion of the transaction, representatives of Amethis and KTH joined the Fidelity Board of Directors.
The bank has also signed a US$60 million tier II syndicated facility agreement with a consortium of European Development Financial Institutions (EDFI) arranged by DEG-Deutsche Investitions and EntwicklungsgesellschaftmbH from Germany.
The financing partners are DEG, with US$18.5 million, FMO, US$18.5 million, SWEDFUND, US$14 million, and the European Financing Partners S.A., US$9 million, with DEG as the overall facility agent of the transaction.
The Managing Director of Fidelity Bank, Mr Edward Effah, said “KTH, Amethis, Rothschild and EDFI’s funding is a vote of confidence in the board and management of the bank.”
He explained that “Our strategy is to prudently grow our asset base and become a leading bank in Ghana. We welcome our investors and look forward to a long-term partnership that will complement our strategy and enhance our ability to access global markets.”
KTH’s Chief Investment Officer, Jacob Hinson, noted that “This is a significant transaction for KTH and we are encouraged by the strength of our partnership with Fidelity Bank. As we look to developing our pan-African strategy further, the importance of identifying and exploring opportunities across key sectors remais a core focus area."
“Based on its sound and stable performance, as well as its increasing visibility and recognition within the industry, Fidelity, in our view, is one of the best performers in the Ghanaian banking sector,” declared Laureen Kouassi-Olsson, the Investment Director in charge of Amethis Finance’s Investment Strategy in the Financial Sector.
This second equity investment in the sub-Saharan African banking sector confirms Amethis’s commitment to support leading participants in the Continent’s financial services industry in the achievement of their growth and expansion plans, as well as their long-term strategic goals,” she added.
Commenting on the Transaction, ERES’ Deputy Director, Pierre Rousseau, said “We are very pleased to be partnering with Fidelity Bank on our first investment in Africa. We believe that Fidelity Bank is the best independent player in the Ghanaian banking market, thanks to a culture of high customer service, efficient processes and product innovation.”
Commenting on the tier II transaction, DEG’s Regional Director for West Africa, Andreas Voss, said, “As SMEs represent over 90 per cent of all registered businesses in Ghana, an ailing sector can slow-down the growth of the economy, hence the need to support the sector.
It is against this backdrop that DEG has been mandated by Fidelity Bank for arrange a tier II facility of up to US$60 million and as part of it, providing a USD18.5 million subordinated loan facility.
Kagiso Tiso Holdings (KTH) is a South African-based black-owned and managed investment holding company with robust investment platforms in key growth areas, particularly in media and Information and Communications Technology (ICT), health care, resources, and financial services, in South Africa and across Africa. KTH’s key shareholders include two charitable institutions, Kagiso Trust and Tiso Foundation, which together own approximately 46 per cent of KTH, as well as Tiso Investment Holdings and Remgro, South African investment companies.