Guaranty Trust Bank Plc - GDR Offer

[Big-K]

Does anyone know how this works?

Guaranty Trust Bank (GTBank) Plc is inviting both local and foreign investors to buy into its public offering of N96 billion ($750 million).

Unlike the conventional public offer, the bank is asking the investing public to buy into its Global Depository Receipts in dollars that is convertible to shares at the instance of the holders of the receipts. The Global Depository Receipts will be listed both on the London Stock Exchange and the Nigerian Stock Exchange.

The offer which is two faced has the foreign component which is giving a total of $500 million (N64 billion) investment opportunity to foreign investors while $250 million ( N32 billion) is being offered to local investors. The offer will close on July 19, 2007.

Although the funds raised is to be denominated in dollars, Nigerian based investors can subscribe in Naira in view of the CBN decision to grant permission to convert such Naira subscriptions into dollar. The minimum that an investor can subscribe is 50GDR at $12-$13 per GDR, meaning that a minimum of about N80,000 is required to invest in the offer.

Interestingly, subscribers will not be subjected to the 3-4 months plus that it takes to receive the shares but will be able to trade their shares almost immediately as investors funds will not be subjected to CBN verification.

J.P. Morgan Securities Limited and Morgan Stanley & Co. International Plc are the Joint Bookrunners/Global Co-ordinators/International Underwriters of the GDR Offer, while Afrinvest (West Africa) Limited is the Local Co-ordinator. The members of the Domestic Underwriting Syndicate are Afrinvest (West Africa) Limited, BGL Limited, FBN Capital Limited, First City Monument Bank Plc, Futureview Financial Services Limited, IBTC Chartered Bank Plc, Sterling Capital Markets Limited, Vetiva Capital Management Limited and WSTC Financial Services Limited.

Dear Sir/Madam

As you may be aware IBTC Chartered Bank Plc is acting as Joint Issuing House/Underwriter to the Guaranty Trust Bank Plc ("GTBank") domestic Offering of US$250 million Global Depository Receipts ("GDRs") which will be listed on the London Stock Exchange. The GDRs are being issued at a Reference Price of US$12.75 (or N1,625.00) per GDR and 1 GDR is equivalent to 50 GTBank shares. The minimum subscription is 50 GDRs (i.e. US$637.50 or N81,250.00) and applications should be made in multiples of 50 GDRs. The GDRs can also subsequently be exchanged for ordinary shares in GTBank.

The domestic Offering opened today and is expected to close on Thursday, 19 July 2007 and interested investors will be required to submit application forms and make payment in naira or US$ before the closing date. You will also be required to open Domiciliary accounts (if you do not already maintain one) into which future dividends (in US$) on the GDRs will be paid. If you wish to fund your application from your Investment Margin Facility, please fill and sign the indemnity letter (attached) and return to us alongside your filled application form.

[Fjord]

GTBank disappointed.

For an offer open for only a few days, an online option should have been top of the list. A failure to think deep and clearly, or a design to keep people out?

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