Ghana, Africa’s largest gold producer, is planning an up to $500 million listing of its gold royalty fund in London in October, though the deal could still run into political opposition, three sources familiar with the matter told Reuters.
Agyapa Royalties, a government-backed fund that holds equity interests including mining royalties in the state's gold assets, has hired Bank of America BAC.N and JPMorgan JPM.N to pursue an initial public offering (IPO) on the London Stock Exchange this year, the sources said.
Royalties are payments that give the owner the right to receive a percentage of production from a mining operation, or retain a stake in them.
Ghana wants to take advantage of the precious metal’s strong performance this year to raise $400 million-$500 million from the IPO, the sources said. The fund’s shares will also be listed on the Ghanaian Stock Exchange.
However, the listing could be derailed or pushed back because of resistance from Ghana’s main opposition party ahead of a December general election, the sources said.
“It’s genuinely 50-50 at the moment, but if the local politics works out, the deal is ready to go this year,” said one of the sources.
The listing provides an opportunity to raise funds without increasing the national debt burden, Ghana’s deputy minister for finance Charles Adu Boahen said, and capital raised will be invested in infrastructure, education, health, and housing.
In written answers to Reuters’ questions, Adu Boahen dismissed the opposition National Democratic Congress’s criticism of the listing and said Agyapa Royalties’ registration in Jersey is for tax efficiency.
“The Opposition is saying many things, which is understandable considering this is an election year,” he said. “Agyapa does not seek secrecy and... will comply with international corporate governance standards.”
JP Morgan declined to comment while Bank of America did not immediately respond to a request for comment.
If it goes ahead, the listing would benefit from a surge in gold prices as the COVID-19 pandemic pushed investors into safe-haven investments.
While the spot gold price has come off a record high hit in August, it is still up a whopping 27% so far this year at $1,931 an ounce.
Canadian companies Yamana Gold and Wheaton Precious Metals have both signalled their intention to add a London listing this year.
For London investors, it is an opportunity to increase gold exposure and potentially fill the gap left by South Africa's Randgold, which delisted in 2018.
The deal would also come at a time when the market for IPOs has come roaring back after a dismal first half of the year, with The Hut Group THG.L sealing a 5.4 billion pound ($6.99 billion) float last week.
Latest Stories
-
Ghana-Russia Centre to run Russian language courses in Ghana
3 hours -
The Hidden Costs of Hunger: How food insecurity undermines mental and physical health in the U.S.
3 hours -
18plus4NDC marks 3rd anniversary with victory celebration in Accra
6 hours -
CREMA workshop highlights collaborative efforts to sustain Akata Lagoon
6 hours -
2024/25 Ghana League: Heart of Lions remain top with win over Basake Holy Stars
7 hours -
Black Queens: Nora Hauptle shares cryptic WAFCON preparation message amid future uncertainty
7 hours -
Re-declaration of parliamentary results affront to our democracy – Joyce Bawah
7 hours -
GPL 2024/25: Vision FC score late to deny Young Apostles third home win
8 hours -
Enhancing community initiatives for coastal resilience: Insights from Keta Lagoon Complex Ramsar Site Workshop
8 hours -
Family Health University College earns a Presidential Charter
8 hours -
GPL 2024/25: Bibiani GoldStars beat Nsoatreman to keep title race alive
8 hours -
GPL 2024/25 Bechem United keep title hopes alive with narrow win over FC Samartex
8 hours -
2024/25: Dauda Saaka scores as Asante Kotoko beat Dreams FC
8 hours -
M.anifest reflects on galamsey’s devastation 11 years after ‘No Shortcut to Heaven’
9 hours -
We’ll have the last laugh – Sammy Gyamfi slams EC’s “cantata” re-collation
9 hours