On this roundup of major company news from Nigeria, we cover news from companies such as Guinness, Nigeria Breweries, MTN, Airtel, Seplat, Stanbic etc. It was a busy week in the business world. This news compilation is for the week ended January 28, 2017.
Airtel Chairman reveals job cuts is certain if it foes ahead with planned mergers and sales of its African Operations
The Chairman of India’s largest mobile-phone operator, Bharti Airtel Ltd, Sunil Bharti Mittal, last week disclosed that the company is considering mergers or sales of its stake at some of its Africa operations so as to cut debt and make its biggest overseas acquisition profitable.
He said that the development could result in job cuts at various levels and shrinking of businesses in countries of operations on the continent including Chad, Democratic Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Seychelles, Tanzania, Uganda and Zambia.
Total denies exit rumours; Says it will continue to operate in Nigeria.
Despite rumors making the rounds in the Nigerian media, Total Nigeria Plc CEO has denied rumours that the company planned to leave Nigeria soon. He mentioned this at a recently held Customer Service Day at Onigbagbo Total service station in Ikeja
Here’s the CEO
“There were rumors that we wanted to leave the country. That is not the case. Total wants to stay in Nigeria.”
Total recently indicated plans to spin of its downstream asset in Nigeria feeding rumours that an exit could be in the offing. Mobil Nigeria recently announced a sale of its downstream assets to NIPC Plc and as part of the deal will see its staff transfered to NIPCO management. However, the will still trade under the Mobil brand name.
MTN postpones listing on Nigerian Stock Exchange to 2018
The CEO of MTN Group, Phuthuma Nhleko, revealed last week that MTN’s plans listing on the Nigerian stock exchange is likely to happen in 2018 rather than the 2017 earlier promised.
He made this comment at the annual meeting of the World Economic Forum in Davos, Switzerland.
It’s a work in progress and hopefully within the 12 to 18-month period we will be able to do it. Regulatory issues need to be resolved, and the macro conditions need to have improved.”
We’ve always intended to list — we have reaffirmed that with the government. “Clearly, we can only list when the conditions are conducive.” said Nhleko, indicating that current market conditions and the performance of the All Share Index are key reasons for the increasingly real postponement date. Phuthuma Nhleko
Equity Assurance Plc Appoints New Managing Director
The board of directors of Equity Assurance Plc has announced the appointment of Mr. Morufu Olakunle Apampa as new Manging Director. His appointment follows the resignation of Mr. Ekpe Ukpabio which was effective 30th November, 2016.
Prior to joining Equity Assurance, Mr. Apampa was a General Manager/Divisional Head, Non-Life business at AIICO Insurance Plc.
Nigeria Breweries Confirm TMDK Instigated A Police Investigation Against Its Managers
Nigeria Breweries Plc (NB) reported last week that one of its suppliers, TMDK Oil traders petitioned the police against it, thus instigated summons of some its senior officials.
According to the press release issued by the company, Nigerian Breweries explained that TMDK participated in a recent tender process for supply of petroleum products to NB and later accused the brewer of bias. The complaint was handled and investigated by NB’s internal audit department and the conclusion was that the tender process was duly followed and no irregularities were found. “Other claims relation to extra costs made by TMDK are currently being analysed and evaluated”, NB claimed. However, it appears that TMDK did not accept the investigations made by NB and subsequently reported the matter to the police.
TMDK is a is a subsidiary of Tamaidukka Investment Company Ltd an indigenous Nigeria company that was incorporated in 2001, and ventured into petroleum products, trading and services by establishing TMDK Oil Traders in 2013.
TMDK’s area of specialization is trading in petroleum products, Vendor Managed Inventory Operations (VMIO) to multinational companies and Services Stations providers.
Guinness Shareholders Approve Rights Issue
Last week, the Shareholders of Guinness Nigeria Plc approved the board’s resolution to raise about N40 billion in rights issue. The company issued a press release confirming this approval on Tuesday.
However, the event was not without its usual moments. Nairametrics was at the event and noted the following;
For example,
- Resolution 1b seeks to authorize the Directors of the company to apply any outstanding loan facilities towards payment of rights issue.
- This means, shareholder loans will be converted into equity thus no new capital will be injected into the company (though they might claim cash will also not exit the business).
- The question however was, if the rights issue is for the purpose of raising working capital, why then is Diageo seeking to convert its loan into equity?
- Also, Resolution 1c seeks the waiver of the preemptive rights of shareholders to any unsubscribed shares and authorise the directors to issue such shares to interested parties. Who are these interested parties who are not current shareholders ?
- In a rather surprising observation, the resolutions did not include the freedom of shareholders to trade their rights. While the chairman took of note of the observation, we are unsure of how this will be implemented, considering that it wasn’t officially approved along with other resolutions that had been passed.
- At the EGM, Babatunde Savage, the chairman refused to state whether Diageo had intentions of converting their debt into equity.
- He also initially refused to state how much Guinness Nigeria owed, despite repeated inquiry by Nona Awoh a shareholder and activist.
- After claiming that the closed period prevented him from stating a figure, he mentioned the sum of 9.8 billion naira as at September 2016. Guinness 2016 first quarter results ending September 2016 showed a total debt of about N33 billion.
Nipost writes CBN, seeking fraud investigation against banks remittance of Stamp Duty charge
The Postmaster General of the Federation, Mr. Bisi Adegbuyi is reported to have sent a letter to the Central Bank of Nigeria, informing it of its decision to begin forensic audit of the stamp duties collected by commercial banks on its behalf since January 2016.
Adegbuyi in the letter informed the CBN Governor, Godwin Emefiele, of the decision to carry out the forensic audit to compare the amounts charged by the banks for the period and the amount remitted to the Stamp Duty Account with the CBN.
About 22 banks have been deducting N50 for every deposit of N1000 and above since January 2016 when the law was put to effect. However, at a recent meeting with officials from the Office of the Accountant General of the Federation, CBN, NIPOST and the Revenue, Mobilisation, Allocation and Fiscal Commission, the officials were unanimous in their displeasure over the amount being remitted into the stamp duty account as they claimed that ‘it was far from what an educated guess would suggest’ should come in.
Based on this, the meeting resolved that NIPOST should appoint forensic auditors to cross check the amount that accrues to the government from the deductions made by the bank. Having already advertised for forensic auditors to carry out the probe, NIPOST informed the CBN officially of the actions about to be taken in the banks under their control.
Minister of Communication insists Government must not “scare MTN away”
The Minister of Communication, Mr. Adebayo Shittu, has stated that MTN Nigeria and its estimated $20 billion investment in Nigeria so far has become key to the sustenance of the Nigerian economy.
Nigeria currently has local and foreign telecoms investment totaling over $68 billion, according to the Nigerian Communication Commission (NCC) data out of which MTN has been instrumental to close to $20 billion investment.
MTN has the largest infrastructure build in the country, making other operators, which have not deployed facility in certain areas to ride on the expansive network of MTN.
As at 2015, MTN said its investment in Nigeria had reached a whopping $15 billion with over 80% directed at building a robust telecommunications infrastructure, including base stations, switching sites and several kilometers of fibre optic laid across the length and breadth of the country.
The minister has therefore cautioned that Nigeria must not scare away MTN just as lawmakers investigate alleged illegal money transfers three months after the government fined them over $1 billion.
“Nobody will say that MTN is not important to Nigeria; we must encourage them, we must not scare them away from Nigeria,” Shittu said in an interview.
Guinness Post Back To Back Losses For Only The Second Time In 30 Years
Guinness, Nigeria’s second-largest brewer, posted its second loss in at least 30 years as a recession ravaged Nigeria burns through operating lines of businesses.
Guinness, subsidiary of Diageo posted loss of N4.66 billion for the 6 months through December compared to a profit of N1.17 billiona year earlier, it said in an e-mailed statement received by Nairametrics.
However, revenue was up 19% to N59.49 billion despite a slow growing economy. Operating losses of N89.19 million was recorded in the period under review.
The loss was due to interest expenses on obligation that include dollar denominated debt. Net finance costs were N4.50 billion while total debt in the balance sheet stood at N47.26 billion.
Imo partners with Dana Air to Launch New Airline
Last week, the Governor of Imo state, Owelle Rochas Okorocha disclosed that the state had signed a 10 year partnership with Dana Air services to launch Imo Air.
Okorocha said the government ventured into airline business to ‘drive traffic into Imo State and aid movement of passengers and goods into the state’.
He disclosed that 200 Imo indigenes would be employed in the new airline services while sons and daughters of the state would enjoy 10 percent rebate in ticket. The services commenced with Lagos-Owerri and Owerri- Abuja flights while more routes would be opened in due course.
According to Rochas
“We have no Air Operator Certificate and that is why we approached one of the leading airlines in Nigeria to manage this service for us. We believe that our partnership with Dana Air to operate Imo Air is a step in the right direction to open Imo State to the world”.
Manager of Dana Air, Mr Obi Mbanuzuo said,
“We are delighted about this partnership, and we have no doubt that Imo Air is in safe hands, as the choice of Dana Air to operate Imo Air, was an excellent and well thought-out decision by the proactive governor of Imo State.
NLNG to flood markets with cooking gas
The Manager, External Relations of NLNG, Mr Tony Okenedo, assured the public on Friday that an additional 13,000 metric tonnes of cooking gas will be made available and would be released to the market immediately.
“NLNG’s LPG vessel successfully discharged 13,000 metric tonnes of gas to Lagos jetty on Jan. 15. Another 13,000 metric tonnes is expected to be discharged any moment from now. The vessel has gone to load gas at NLNG’s facility in Bonny and it had returned to Lagos to discharge.”
Okonedo also said that the NLNG was alleviating the impact of price variations, insisting that the company would continue to work with stakeholders to stabilise gas price.
However, the Executive Secretary, Nigerian Association of LPG Marketers, Mr Bassey Essien, said that the price of cooking gas was still on the high side and that NAV Gas Company was selling 20 metric tonnes of gas for about N5.5m as against N3.5m in November 2016.
Cooking Gas prices has remained high in Nigeria since this year and the latter part of 2016. A recent article suggest cooking gas prices rose because the global hub prices of LPG, which NLNG & Co is indexed to has spiked.
Stanbic IBTC Holdings Appoints New Chief Executive
The Board of Stanbic IBTC have announced the resignation of Mrs. Sola David – Borha as Chief Executive to take up a new role as Chief Executive (Rest of Africa) at the Standard Bank Group in South Africa. Her resignation took effect on Thursday 19 January 2017.
The Board also announced the appointment of Mr Yinka Sanni as the new Chief Executive of Stanbic IBTC Holdings PLC with effect from Thursday 19 January 2017. Mr. Sanni, who prior to his new appointment, was Chief Executive of Stanbic IBTC Bank PLC, (“the Bank”) brings with him over 26 years’ experience in financial services covering Banking, Pension and Asset Management.
Dr. Demola Sogunle, the current Deputy Chief Executive of the Bank, has assumed the role of Chief Executive of the Bank (effective 25 January 2017) following Mr. Sanni’s elevation as Chief Executive of Stanbic IBTC Holdings Plc.
General Electric to invest in refineries in Nigeria
General Electric Co (GE.N) last week announced that it was leading a consortium to invest in Nigeria’s three oil refineries located in Port Harcourt, Warri and Kaduna.
GE’s plan, according to Reuters, compares to similar promises from companies like Italy’s Eni (ENI.MI) to work with Nigeria to rehabilitate the country’s three oil refineries could help the government as it tries to reduce costly imported oil products.
GE made this known in a presentation to the Nigerian National Petroleum Corporation (NNPC),Group Managing Director(GMD), Dr. Maikanti Baru and his team, said that its team of partners, including its consortium involving the Engineering, Procurement and Construction (EPC) partners, off-takers, traders and some financiers would be engaged in the initiative.
“We were involved in the tenders that started around last year, which was subsequently withdrawn, but our commitment to bringing the refineries on-stream is still very deep and we are very serious about it. We propose that work commences either with the Warri or Port Harcourt Refinery as a pilot, as we set a target to improve the refinery capacity before the end of 2017,’’ the company stated in its presentation.
The Minister for Petrleum, Dr Ibe Kachikwu had last year said that the federal government may sell the three refineries in Kaduna, Warri and Port Harcourt after they have been fixed and certified operationally efficient. According to him, our three refineries may be “worth scrap by the time Dangote Refineries come on stream”.
Court orders forfeiture of Malabu Oil Block
The Federal High Court, Abuja, last week ordered the interim forfeiture of Oil Prospecting License (OPL 245) to the Federal Government pending investigation and prosecution of suspects in the $1.1bn Malabu Oil scam.
According to reports from the News Agency of Nigeria (NAN), Justice John Tsoho of the Federal High Court, granted the order following an ex-parte motion filed by the Economic and Financial Crimes Commission (EFCC) through its counsel, Mr Johnson Ojogbane.
The property is to be managed by the Department of Petroleum Resources on behalf of the federal government, pending the conclusion of investigation and prosecution of all those involved.
The other suspects named in the application are Shell Nigeria Ultra Deep Limited, Shell Nigeria Exploration Limited, Nigeria Agip Exploration Ltd and other individuals.The EFCC counsel in the motion noted that the investigation bordered on alleged acts of conspiracy, bribery, official corruption and money laundering.
The News Agency of Nigeria (NAN) recalls that the EFCC had in December 2016, charged nine suspects, including the former Attorney-General of the Federation and Minister of Justice, Mr Mohammed Adoke, over the issue. Adoke was accused of illegally transferring more than $800 million purportedly meant for the purchase of the OPL 245 to Etete, Malabu Oil.
Shell wins a major battle against Niger Delta villagers
A British court ruled last week that against Villagers from the Bille and Ogale communities in Nigeria’s oil-rich Delta region who were trying to pursue oil spill allegations against the company’s Nigerian subsidiary Shell Petroleum Development Company of Nigeria (SPDC).
The court ruled that the suit did not establish that Shell, the parent company, had legal responsibility for SPDC’s actions.
“The claimants have failed to demonstrate that the first threshold requirement – is there a ‘real issue’ between the claimant and the anchor defendants – is met,” the ruling stated. Leigh Day, a law firm representing the villagers, said it would appeal the ruling.
Igo Weli, SPDC’s general manager for external relations, said the firm hoped “the strong message sent by the English court today ensures that any future claims by Nigerian communities concerning operations conducted in Nigeria will be heard in the proper local courts”.
The Nigerian villagers argued domestic courts were unfit to hear their case, while Shell said the matter was a uniquely Nigerian issue and should be heard there.
Seplat Confirms It Has Been Taken To Court Over OML 25 Deal
Seplat Petroleum Development Company Plc issued a press release on Friday informing the market that Crestar Natural Resources Limited had taken it to court over the planned acquisition of OML 25.
According to Seplat, proceedings commenced in the English High Court against its wholly owned subsidiary, Newton Energy Limited, by Crestar Natural Resources Limited relating to the deposit of US$20.5 million currently held in an escrow account.
It further explained that the Escrow Monies related to the potential acquisition of an interest in OML 25 by Crestar, which Newton has an option to invest into, and were put into escrow in July 2015 ahead of the planned consummation of the deal. The press release did not provide further details explaining what the case really is against Seplat and why Crestar is suing. However, it appears the bone of contention is the escrow monies and its application considering that the deal, which started in 2014, is yet to be concluded.
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