Agyapa Royalties Limited: a brief on potential valuation of the IPO
The study was commissioned by the EITI International Secretariat in consultation with Ghana EITI (GHEITI).
The decision by the government in Ghana to create a royalties company to manage most of its royalties from the industrial gold sector, and float nearly half of it to private investors, has raised concerns, including on issues ranging from valuation to future fiscal policy to transparency. Open Oil's analysis focuses principally on the valuation of shares of Agyapa Royalties Limited and whether it is undervalued, overvalued or the known valuation figures seem to be "fair" for the country.
Based on a discounted cash flow financial model, analysis made by Open Oil concludes that the guidance range for the value of 49% of Agyapa shares, of between $500 million and $750 million, looks to be low, and the shares undervalued. The Open Oil model suggests Agyapa 49% valuation, if made on the spot price of gold today, could be worth US$ 1.47 billion, this number is comparable with the valuation known by Parliament members.
This study was commissioned by the EITI International Secretariat in consultation with Ghana EITI (GHEITI).
The model of the report can be accessed online here.
