Corporate Actions

There have been several corporate actions on the Ghana Stock Exchange (GSE), these
include;

Listing of additional shares AGA, SOGEGH, CAL etc.

Bonus share issues SCB, SOGEGH
Rights issues SOGEGH, GGBL, GOIL
Delisting CFAO, ABL
Stock Splits SCB
Appointments and resignations of Board members and Key Management Officers
Hostile Takeovers Dannex and SPL
Mergers and Acquisitions Ecobank & TTB, Republic Bank & HFC.
Private Placements HFC (increase their Stated Capital)
Change of Name, Acronym and Logos GCB Bank, SGSSB, EBG to EGH, PBC
Limited, CAL Bank,
Dividend payments
Halt in business operations AGA,

Bonus Issue (or Scrip Issues)

Standard Chartered Bank November 2012

Total Petroleum August 2013
GOIL December 2013
SOGEGH May 2015

In a Bonus Issue, shareholders are awarded additional securities free of any payment. It is
sometimes referred to as "Scrip Issue" or "Capitalization Issue" and is effectively a free
issue of shares paid for by the company issuing the shares out of capital reserves. It is
somehow similar to Stock Splits or Stock dividends.

Case Study Societe Generale Ghana (SOGEGH)

The Bank announced a Bonus issue on March 31, 2015 in a ratio of 1 for 10 (one new share
for every 10 existing shares). The Company issued additional 33,387,375 shares through
the Bonus issuance.

Adjusted Price or Theoretical Ex-Bonus Price

=
1 +

Issued Shares before the Bonus Program = 333,893,894

Bonus Shares = 33,387,375

Market Price before bonus issuance= GHS0.98

33,387,375
Bonus Share Percentage = = = 9.9994%
333,893,894
 Corporate Actions

0.98
=
1 + 0.099994
= GHS0.8909

= GHS0.89 per share on Ex-Date

Right Offerings (or Rights Issues)

GGBL May 2016 GHS1.87/share

GOIL May 2016 GHS1.24/share

Through Rights offerings, companies seek to increase their capital by issuing new
securities or shares. It results in capital inflow and increase in the number of shares
outstanding as well as the overall market capitalization of a company.

Existing shareholders are given a chance to maintain their stake in the company to
prevent dilution. The Right provides the opportunity to buy a proportional number of
additional shares at a subscription price usually at a discount within a subscription period.

On the payment date, the shareholder who exercised their rights will receive the ensuing
securities and will pay the company the exercise price. Unexercised rights lapse.

Rights can be transferable or non-transferable. Transferable rights (renounceable rights),

are issued to existing shareholders and can be traded whereas non-transferable (non-
renounceable) rights cannot be traded. Shareholders who do not exercise the rights will
likely see dilution in the value of their holdings.

Case Study GOIL

GOIL has added 139,639,640 ordinary shares to the companys number of issued shares
through a renounceable rights issue. This brought the total issued shares to 391,863,128.
The offer was valued at GHS 1.24 per share in the ratio of 0.5536 new shares for every 1
existing share. The company at the end of the issuance raise GHS 176,574,018.42 from an
expected GHS 173,153,153.60 representing an oversubscription of 0.98%.

Adjusted Price or Theoretical Ex-Bonus Price

+
=
+

Issued Shares before the Rights Issue = 252,223,488

Number Shares Issued = 139,639,640

Closing Price = GHS 1.51

Subscription Price = GHS 1.24

 Corporate Actions

(1.24 1) +(1.51 0.5536)

=
1+0.5536

1.24 + 0.8359
=
1.5536
= GHS 1.3362

= GHS 1.37 per share on Ex-Date

Price of the Right

=
= 1.51 1.34

= .

Alternatively,

Pricing of Rights
Number of shares outstanding prior to rights issue 252,233,488 a
Price per share before right issue GHS 1.51 b
Number of rights for ev ery share owned 1 c
Number of rights needed to buy a share 0.5536 d
Price per share with rights GHS 1.24 e

Value of Equity in firm before rights issue GHS 380,872,566.88 f

Value of Equity After rights issue GHS 945,846,420.06
Value per share before rights issue GHS 1.51
Value per share after rights issue GHS 1.34
Value of a right GHS 0.17
 Corporate Actions

Formulae

Value of Equity in firm before rights issue

=
Value of Equity after rights issue

= + ()

Value per share after rights Issue

+
=
+

Value of a Right
=