Bank of Ghana says ready to supply liquidity to ‘troubled’ Merchant Bank as takeover deal fails

bank-of-ghanaThe Bank of Ghana says it has put in place a measure to protect Merchant Bank Ghana (MBG) as a deal by South Africa’s FirstRand Bank (FRB) to takeover the bank failed to materialize.

Merchant Bank is said to be reportedly indebted to the tune of about GH¢200 million which is believed to have necessitated its proposed sale of 75% shares for $91 million to FRB.

The take over deal got to the regulatory approval stage which the BoG in May 2013 said it will only okay when all public concerns surrounding the sale have been resolved.

But on July 12, 2013, the Social Security and National Insurance Trust (SSNIT) which has majority shares in MBG announced FRB’s offer to acquire Merchant Bank has failed as parties were unable to reach agreement on the commercial principles underlying the transaction and could not procure the fulfillment of all the precedent conditions.

Soon after the announcement, the BoG also issued a statement on July 12, 2013 that it is ready to provide liquidity support to MBG. “… the Bank of Ghana will provide liquidity support to MBG, if needed, to address any liquidity challenges it may face,” the central bank said.

The central bank assured the general public of its readiness to safeguard the operations of Merchant Bank and protect the interest of customers and all stakeholders of the bank.

The BoG says it is monitoring developments in Merchant Bank.

Meanwhile, a new process is set to begin for the sale of MBG as FirstRand has indicated interest, according to officials at SSNIT.

By Ekow Quandzie

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