GTB holds back dividends for GDRs holders due to dollar shortage
Guaranty Trust Bank (GTB) on Tuesday said payment of dividends to holders of its Global Depository Receipts (GDRs) has been delayed due to difficulties in sourcing dollars.
The lender said in a note to GDR holders that its registrar – the company which maintains lists of bond and shareholders – was in a queue with the Central Bank of Nigeria (CBN) to purchase dollars to enable it pay the dividends to the GDRs holders.
Nigeria has experienced dollar shortages following a decline in the country’s earnings from crude oil exports, which accounts for about 90 percent of the West African country’s foreign exchange inflows.
The CBN has reduced its intervention in the domestic foreign exchange market as it continues to juggle priority dollar sales to the productive sector and other essential endusers.
GTBank, Nigeria’s top lender, declined to comment on the size of the dividend to be paid to holders of its GDRs, which are traded in London. It issued the GDRs in 2007 to raise $750 million. It paid out a total dividend of N2.80 per share in 2019.
Traders said the backlog of demand for dollars by foreign portfolio investors is closed to $2.8 billion as many of them could not repatriate their funds due to the shortage of dollars.
Nigeria’s foreign exchange reserves were down to $35.62 billion by August 14, from $38.53 billion they opened the year on January 2.