Gowling WLG helps GuarantCo facilitate first dual listing of Ghanaian corporate debt

26 November 2018

Gowling WLG are pleased to have advised long-standing client GuarantCo in respect of the listing by Quantum Terminals Group (QTG), on the London Stock Exchange. Quantum), a leading energy infrastructure developer in Ghana, has listed its GHS 45 million (USD 10 million) corporate bond, guaranteed by GuarantCo (a member of the Private Infrastructure Development Group (PIDG)), on the London Stock Exchange's International Securities Market - completing a dual listing of the debt security, having previously listed it on the Ghanaian Stock Exchange earlier in the year. The QTG bond is to support the operations of its liquid petroleum gas (LPG) storage business.

To mark this milestone there was a special opening ceremony at the London Stock Exchange this morning presided over by Harriet Baldwin, the Minister of State for Africa, his Excellency, Papa Owusu-Ankomah, Ghana's High Commissioner to the UK and Emmanuel Egyei-Mensah, Executive Director of Quantum Terminals Group.

The QTG bond is the first local currency corporate bond from Ghana and West Africa to list on the London Stock Exchange; as well as being the first debt security issued by a non-financial institution to list on the Ghanaian Fixed Income Market (its 10-year tenor marks another first for a listed Ghanaian corporate debt security).

The QTG bond has a 75 percent partial credit guarantee from GuarantCo for the benefit of local pension fund investors that have subscribed to the issue. This is the first tranche of a planned GHS 140 million bond programme by QTG.

The Gowling WLG team, which comprised of Alasdair McKenzie, Andrew Newbery and Jonathan Brufal, are proud and honoured to have advised long standing client GuarantCo on this first in class transaction; with the invaluable help and support of leading Ghanaian law firm, AB & David (with their team being led by partner Ferdinand Adadzi).

A testing transaction but ultimately highly rewarding given the potential effect the dual listing is anticipated to have in Ghana (and more widely) going forward as GuarantCo, in partnership with the LSE, seeks to support further local currency bond dual listings by emerging market corporates as a means to support local currency financing for infrastructure projects in lower income countries to assist with the alleviation of poverty.

Gowling WLG's work involved advising GuarantCo on the QTG bond structure and terms, its partial guarantee of the QTG bond, its recourse and local law security arrangements with QTG, as well as certain intercreditor arrangements with the bond holders (given the partial nature of the guarantee).

Emmanuel Egyei-Mensah, Executive Director of Quantum Terminals commented: "The success of the bond is testament of investor interest in building exposure to Ghana which we are now looking to expand through our London listing. GuarantCo's guarantee has been critical in facilitating our first local currency corporate bond transaction. This is a great example of how development finance institutions should be partnering with the private sector. The London listing of the bond will signal a new beginning for corporates accessing capital markets in Ghana."

Lasitha Perera, CEO of GuarantCo, said: "The listing represents a major milestone for Quantum Terminals Group and GuarantCo. Supporting the development of local capital markets is a priority for PIDG companies, and Ghana's capital markets have a crucial role to play in the development of the country's infrastructure sector that is critical to its economic development and future prosperity. We hope that through this precedent and framework, the listing will encourage other corporates so that investors can benefit and stimulate the growth of local capital markets in Africa."

On Gowling WLG Las said: "Delighted to have worked with them again, we had more than a few twists and turns as the deal developed over the months, but the team kept supporting us and, most importantly, supporting what all parties were trying to achieve, credit to them and great to get this over the line."

Commenting on the Gowling WLG team's role in the process, Alasdair said:

"It has been both a pleasure and privilege to play a role in helping build the profile of an innovative and forward thinking African venture. The significant milestones that Quantum have achieved this year are a fantastic sign of the opportunities and expansion that the firm is likely to enjoy over the next twelve months as the wider impacts of this transaction become more widely appreciated."

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