(Adds comment from Ghana's deputy finance minister)
By Abhinav Ramnarayan, Clara Denina and Helen Reid
LONDON/JOHANNESBURG, Sept 21 (Reuters) - Ghana, Africa's
largest gold producer, is planning an up to $500 million listing
of its gold royalty fund in London in October, though the deal
could still run into political opposition, three sources
familiar with the matter told Reuters.
Agyapa Royalties, a government-backed fund that holds equity
interests including mining royalties in the state's gold assets,
has hired Bank of America and JPMorgan to pursue
an initial public offering (IPO) on the London Stock Exchange
this year, the sources said.
Royalties are payments that give the owner the right to
receive a percentage of production from a mining operation, or
retain a stake in them.
Ghana wants to take advantage of the precious metal's strong
performance this year to raise $400 million-$500 million from
the IPO, the sources said. The fund's shares will also be listed
on the Ghanaian Stock Exchange.
However, the listing could be derailed or pushed back
because of resistance from Ghana's main opposition party ahead
of a December general election, the sources said.
"It's genuinely 50-50 at the moment, but if the local
politics works out, the deal is ready to go this year," said one
of the sources.
The listing provides an opportunity to raise funds without
increasing the national debt burden, Ghana's deputy minister for
finance Charles Adu Boahen said, and capital raised will be
invested in infrastructure, education, health, and housing.
In written answers to Reuters' questions, Adu Boahen
dismissed the opposition National Democratic Congress's
criticism of the listing and said Agyapa Royalties' registration
in Jersey is for tax efficiency.
"The Opposition is saying many things, which is
understandable considering this is an election year," he said.
"Agyapa does not seek secrecy and... will comply with
international corporate governance standards."
JP Morgan declined to comment while Bank of America did not
immediately respond to a request for comment.
If it goes ahead, the listing would benefit from a surge in
gold prices as the COVID-19 pandemic pushed investors into
safe-haven investments.
While the spot gold price has come off a record high hit in
August, it is still up a whopping 27% so far this year at $1,931
an ounce.
Canadian companies Yamana Gold and Wheaton Precious Metals
have both signalled their intention to add a London listing this
year.
For London investors, it is an opportunity to increase gold
exposure and potentially fill the gap left by South Africa's
Randgold, which delisted in 2018.
The deal would also come at a time when the market for IPOs
has come roaring back after a dismal first half of the year,
with The Hut Group sealing a 5.4 billion pound ($6.99
billion) float last week.
(Reporting by Abhinav Ramnarayan, Clara Denina and Helen Reid;
editing by Emelia Sithole-Matarise and Hugh Lawson)
