Corporate Trustees approve participation in Debt Exchange Programme for Pension Schemes
The Chamber of Corporate Trustees of Ghana has granted its members the green light to partake in the alternative debt exchange programme tailored for pension schemes. This development comes in the wake of an announcement by the Ministry of Finance, which outlined plans to restructure ¢31 billion in pension funds through the Domestic Debt Exchange Programme (DDEP).
The ministry’s initiative is set to impact E.S.L.A. Plc and Daakye Trust Plc, prompting the Chamber to collaborate closely with Organised Labour in providing technical guidance. Through this collaboration, an agreement has been reached, allowing Pension Fund Schemes to participate in the forthcoming exchange offer.
In a statement released on Friday, August 4, 2023, the Chamber emphasized that Boards of Trustees of pension funds must independently evaluate the alternative offer presented by the Ministry of Finance and decide on their participation accordingly. This move underscores the importance of ensuring autonomous decision-making within the pension industry.
Moreover, the Chamber encourages pension funds to convene emergency meetings of their Boards of Trustees to facilitate inclusive decision-making in light of the upcoming exchange programme.
With the approval from the Chamber of Corporate Trustees, the stage is now set for pension schemes in Ghana to actively engage in the alternative debt exchange programme. The outcome of this initiative could hold significant implications for the pension sector and its stakeholders, shaping the landscape of financial planning and investment strategies for the future.
Background
The Ministry of Finance has announced the restructuring of ¢31 billion pension funds in the next exercise of its Domestic Debt Exchange Programme (DDEP).
According to the ministry, the exercise will affect the E.S.L.A. Plc and Daakye Trust Plc.
This will include debt in the energy sector such as debt owed the independent power producers (IPPs) and the cocoa bills.
“This Invitation is intended to enable the Pension Funds to preserve their patrimonial value while exchanging their Eligible Bonds for Bonds that offer more potential liquidity” a statement issued by the Public Relations Unit said.
It explained that Eligible Holders tendering their Eligible Bonds pursuant to the invitation will receive Exchange Bonds of the Government on the terms and subject to the conditions described in the Exchange Memorandum.
It added that all offers to exchange Eligible Bonds made by Eligible Holders are irrevocable subject to withdrawal rights under certain limited circumstances.
The statement explained that by “tendering their Eligible Bonds, Eligible Holders represent and warrant that such Eligible Bonds constitute all the Eligible Bonds owned by them and consent to the blocking by the Central Securities Depository (CSD) of any attempt to transfer them prior to the Settlement Date (as defined below) or the termination of the Invitation by the Republic”.
Offers may only be submitted starting today (the “Launch Date”) and ending at 4:00 p.m. (Greenwich Mean Time (GMT)) on 18th August 2023 (the “Expiration Date”).
