Guaranty Trust Bank (GTB) says payment of dividends to holders of Global Depository Receipts (GDRs) will be put on hold due to difficulties in procuring dollars.

GDR is a type of bank certificate that represents shares in a foreign company. The shares are held by a foreign branch of an international bank.

GT Bank said in a note to GDR holders that its registrar - the company which maintains lists of bond and shareholders - is on a queue at the Central Bank of Nigeria (CBN) for dollars to make the payout.

Nigeria's central bank is struggling to make hard currency sales following a recent surge in demand, Reuters reports.

A slump in the price of crude oil in the global market has hit Nigeria hard. Oil is the country's number one foreign exchange earner.

The Central Bank of Nigeria Governor Godwin Emefiele (News360)
The Central Bank of Nigeria Governor Godwin Emefiele (News360)

Foreign exchange reserves in Nigeria have been dwindling fast these days, with the CBN hanging on to scarce dollars in a bid to prop the Naira.

This means that there is now a shortage of hard currency for investors and importers.

GTB has declined to comment on the size of the dividend to be paid to holders of its GDRs, which are traded in London.

The bank issued the GDRs in 2007 to raise $750 million. It paid out a total dividend of N2.80 per share in 2019.

 Segun Agbaje is MD/CEO, GTBank Plc
Segun Agbaje is MD/CEO, GTBank Plc

The Naira fell 1.04% on Tuesday to a low of N480 to the dollar on the black market after the federal government announced that it would reopen airports for international travel on August 29--a move that could increase dollar demand, traders said.

The Naira had been stable for over a week on the black market at N475 to the dollar, where it traded at more than 20% weaker to the official over-the-counter spot market.