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Gov’t to issue GHS260m ESLA bond on Monday

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Adnan Adams Mohammed
The government will today, Monday, 30 December 2019 issue aGHC260 million a 12-year Ghana cedi denominated Energy Sector Levy Act (ESLA) Plc bond to help raise additional funds to pay-off the huge accumulated legacy debt.
The Tranche E4 bond sales was opened to the investing public on 24 December 2019 and will mature on 15 December 2031.
In a statement, ESLA plc said the minimum and maximum issue sizes are expected to be GHC100 million and GHC1 billion, respectively. This issue is part of a GHC10 billion programme to help clear the legacy debt which is expected to hit GHC12.5 billion by 2023, according to the International Monetary Fund (IMF).
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ESLA Plc has, since inception, issued bonds worth GHC6.664 billion. This resulted from issuances in November 2017 (7-year tranche E1 and 10-year tranche E2), January 2018 (tap of 10-year tranche E2-B), August 2018 (tap of 10-year tranche E2-C) and June 2019 (10-year tranche E3), August (tap of 10-year tranche E2-C) and June 2019 (10-year tranche E3).
Significantly, a buy-back and subsequent cancellation of bonds worth GHC664 million in June 2019 brought the total outstanding bond under the programme to GHC6 billion.
The statement further said ESLA will continue to issue bonds and undertake periodic buy-back and cancellation of outstanding bonds as and when the need arises.
Meanwhile, ESLA says it has received the required approval from its bondholders to reduce the ‘Additional Bonds Debt Service Coverage’ Ratio (under Condition 12.3 (c) of the prospectus dated October 12, 2017) from 2x to 1.25x.
The reduction required the votes of the bondholders of ESLA Plc holding a minimum of 75% of the aggregate outstanding bonds. Subsequently, bondholders holding a total of approximately 79.1% of the outstanding bonds have, by way of a written resolution dated 4 December 2019, voted in favour of the reduction.

ESLA was introduced to facilitate the reduction of the energy legacy debts that had engulfed the energy sector.

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