Ghana plans $500 million London IPO of Agyapa Royalties (Gold royalty fund)

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, according to Reuters.

Agyapa Royalties, which is a government backed fund that holds equity interest including mining royalties in the state’s gold assets, has hired Bank of America and JPMorgan to pursue an initial public offering (IPO) on the London Stock Exchange this year.

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, reported by Reuters.

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.

The Agyapa Mineral Royalty Limited has been controversial since its conception. According to Joy Online, an online publication, the 18 milestones that defined this controversial agreement are;

September 28, 2018 – Parliament at the end of a one-week emergency sitting approves Minerals Income Investment Fund (MIIF) Bill 2018 to allow government to set up MIIF to receive royalties from mineral resources and invest them. The bill allows for the creation of a special purpose vehicle (SPV) in any jurisdiction for use to undertake such investments.
December 3, 2018 – President signs MIIF bill into law.
October 7, 2019 – Presidents inaugurates board of MIIF chaired by MP for Tarkwa-Nsuaem George Mireku – Duker.
November 5, 2019 – Government through MIIF incorporates Asaase Royalties Limited with the Jersey Financial Services Commission in Bailiwick of Jersey, a tax-haven, independent Channel Island near UK.
November 15, 2019– Finance Minister Ken Ofori Atta announces plans to list Asaase Royalties Limited on London Stock Exchange in January 2020 to raise $750 million.
January 23, 2020 – Government discloses it has temporarily suspended initial public offering on London Stock Exchange to allow for it to amend rules that will govern operations of Asaase Royalties Limited.
July 15, 2020 – Government lays bill in parliament to amend the Minerals Income Investment Fund (MIIF) law so that any SPV established would have unfettered independence and not be required to operate in accordance with the Public Financial Management Act and the State Interest Governance Authority Act.
July 22, 2020 – Attorney General writes to Finance Minister expressing concern the Agyapa (formerly Asaase) Minerals Royalties Investment Agreement is skewed against the interest of Ghana, unconscionable and will allow for a breach of Ghana’s Banking Act.
August 3, 2020 – Parliament approves amendment to Minerals Income Investment Fund (MIIF) Act.
August 10, 2020 – Name of Asaase Royalties Limited is changed to Agyapa Royalties Limited.
August 12, 2020 – Attorney General writes to Finance Minister after a series of meetings and letter exchanges, okaying the agreement subject to 7 outstanding amendments.
August 13, 2020 – Government lays Agyapa Minerals Royalties Investment Agreement and 4 related documents in parliament for approval; Speaker refers documents to Finance Committee
August 14, 2020 – Minority MPs led by Cassiel Ato Forson address media briefing in parliament to demand the withdrawal of agreement claiming it will give private individuals 49% ownership of the country’s mineral royalties which will be against the interest of the state.
August 14, 2020 – Finance Committee of Parliament submits the report to the floor recommending approval of Agyapa agreement.
August 14, 2020 – Parliament approves Agyapa agreement after Minority MPs walked out.
August 25, 2020 – 15 Civil Society Organisations (CSOs) address media briefing demanding the suspension of Agyapa agreement.
August 28, 2020 – Finance Minister Ken Ofori Atta addresses media briefing at which he defends Agyapa agreement and announces listing on London and Ghana Stock Exchanges will happen in December 2020
September 2, 2020 – Finance Minister meets CSOs over Agyapa agreement as part of further consultations.