Welcome to Miccolo's Blog: Major Corporate News Roundup In Nigeria For The Week Ended 25th February 2017

Here is a roundup and commentary of all the major company related news in Nigeria last week. Last week we had news from KFC, Lekki Gardens, AMCON, Ibru’s, MTN, Spectranet, Universal Steel etc.

Week ended February 25th 2017

A mortgage bank, Jubilee-Life Mortgage Bank Limited last week unveiled an initiative known as ‘rent-to-own your shop’ for business owners and market women. The Asiwaju Bola Ahmed Tinubu Ultra-Modern Market project was developed by Lias Freight Agencies Limited and includes 336 lock up shops and one banking hall and it’s located in Ijaiye-Ojokoro. Rent to own schemes were made popular by the Lagos State government and was used for residential properties. This is the first we have seen for shops. By the way, looked up the Freight Agencies, the project developer and it appears they are into clearing and forwarding.
Last week, Lagosians woke up to learn that all KFC outlets in Lagos will shut down operations from Monday, February 20, 2017. They claimed low patronage and high cost of power was the reason. Thus, KFC Outlets in popular areas such as Ilupeju, Sabo, Ikeja, Ogba and other parts of Lagos metropolis will effectively close with residents unable to have their favourite meal at the outlets. They will only leave KFC shops located in shopping malls. So, if you crave KFC, then visit the ones located in shopping malls
Last week, Telco’s in Nigeria revealed plans to ban of Skype, Whatsapp and other OTP’s because they are taking business away from them. A manager at one of the Telco’s said that had lost about “N100tn between 2012 and 2017.” We don’t know how they came up with that number, maybe they planned to write N100 billion. Anyway…Nigerians reacted angrily to the news, reminding Telco’s that Skype and Whatsapp calls are not free as they incur data charges.
Goodie Ibru last week announced his retirement as the Chairman of Ikeja Hotel Ltd after 32 years of service as founding Chairman. Mr Ibru said he took the decision in the overall interest of the company and the larger Ibru family passing the torch to the younger generation Ibru’s. Just last December a Federal High Court in Abuja confirmed him as Chairman. Looking at the records, under his watch, the company has been consistently late in filing annual reports, despite Ibru being a former vice chair of the Nigerian Stock Exchange. 2014 results show the company made a loss after tax of 2.55 billion naira. Mr Ibru also has a pending case with the Economic and Financial Crimes Commission (EFCC). The stock is currently at a price of 1.78 naira per share.
Lagos State and ARM have partnered to create 500 coding centres in public and private schools across the state. The project called Code Lagos is targeting one million Lagosians. The programme is to be launched in April this year with about 300 of which ARM providing and equipping 15 of the centres.
Last week, MTN Nigeria partnered “world renowned” solar architect, Lumos to launch mobile solar electricity systems for the benefit of families and businesses in Nigeria. Wondering what MTN has got to do with this? Well, it’s based on the way Lumos sells these units. To purchase one, you make a onetime payment, following which the solar panels are installed in your house. The mobile indoor unit is then kept in the house and then you pay via your mobile airtime to access electricity. Could this be a threat to Discos?
Med-View Airlines Plc listed on the Nigerian Stock Exchange with so much fanfare last month. Of course, the listing wasn’t for fun. Companies list either to raise equity or debt, give shareholders options to sell down their equity during IPOs and give future shareholders an opportunity to enter and exit securities at will. Med-View’s reason is to raise equity and sell down equity. The company announced plans to launch its initial public offering (IPO) in the second quarter of the year to raise new equity funds to expand its operations. Managing Director, Med-View Airlines, Alhaji Muneer Bankole, said the company would in the next three months float its IPO to raise additional funds and allow more investors to buy into the company. According to him, the airline would by April expand its operations to Francophone countries within the West African states.
50-year-old Ikeja Based steel company, Universal Steel was acquired by “a new generation of private investors” last week. Investment One Financial Services was the sole financial adviser and arranger for the deal. They brought together a group of private investors to complete the acquisition following the decision of the core investors to sell the company. At its peak, Universal Steel had an installed capacity of 120,000 metric tonnes per annum at its 10 hectares- production facility located within the Ikeja Industrial Scheme, in Ogba, Lagos. We understand Universal Steel will be wound down by the previous shareholders
In a statement to the Nigerian Stock Exchange (NSE), FCMB notified of its reorganization in its management that current MD/CEO Ladi Balogun, will be stepping down (more like stepping up) after being at the helm for ten years. He is stepping down because of the CBN policy which limits bank MDs to a tenure of ten years. He will be replaced by Adam Nuru, Executive Director (ED) of development. However, in keeping it in the family, will remain as Group CEO of FCMB Group effective March 20, 2017 and will be expected to continue calling the shots.
There was bad news last week for the literary community, following the decision of Chevron Nigeria Limited, to withdraw its sponsorship of one of the annual literary prizes of the Association of Nigerian Authors. Chevron blamed the decision on the current economic recession in the country. Chevron Nigeria Limited had been funding the literary prize, since 2001.
German Investment Group, Cube Commodities Company announced that it was setting aside a total sum of €300m (N97.5bn) to finance small-scale industrialists in Nigeria. The Chief Executive Officer, CUBE Commodities Company, Dr. Dean Nguyen, gave the figure on Monday in Abuja during a meeting with members of the National Association of Small-Scale Industrialists. The partnership, according to him, will enable the group to provide the N97.5bn at a low interest rate for industrial development, technology transfer and market development for NASSI members’ products in Europe and Asia. CUBE will rely on the Nigerian development banks such as the Bank of Industry, Nigeria Export-Import Bank and Bank of Agriculture to guarantee the loans before they are disbursed.
The Lagos State Government filed a six-count criminal charge against the Managing Director of Lekki Gardens Estate Limited, Mr. Richard Nyong over the collapse of a five-storey building on Kushenla Road in Ikate Elegushi in Lagos State, which killed at least 35 persons. Lagos State cited the contravention of planning permit regulations as a basis for the charge. The state government also charged eight other persons comprising contractors and promoters of Lekki Gardens for allegedly failing to obtain a planning permit in contravention of the State Physical Planning, Urban and Regional Development Act. Other than the managing director of Lekki Gardens Estate Limited, the other accused are GT Rich Ltd, HC Insight Solutions Ltd, Taiwo Odofin, Omolabake Mortune, Maruis Agwu, Sola Olumofe and Omotilewa Joseph.
Coronation Merchant Bank Limited last week said it reported a profit before tax (PBT) of N5.3 billion in 2016, representing an increase of 128% over last 2015 performance of N2.3 billion. The bank also said its net interest income also increased by 86%, from N4.3 billion in 2015, to N8 billion in the year under review. They also said that their non-performing loans (NPL) ratio stood at zero per cent. Coronation Merchant Bank used to be Associated Discount House Limited and obtained a merchant banking license and an FX dealing license in 2015.
Paint maker, Chemstar Paints Industries Nigeria Limited reported last week that its turnover grew by “double digits” in 2016. This was despite the economic recession and harsh business environment in the country. “We have begun to look inwards to seek for alternatives that we can use to replace some of the imported raw materials. This has helped us greatly and coupled with the fact that we have very loyal customers that stood by us throughout the year.” The Group Managing Director (GMD) and Chief Executive Officer (CEO) of the company, Mr. Emmanuel Awode He also mentioned that about 60% of raw materials used for paints are imported. Mr Awode did not forget to play the forex card. He complained about the Central Bank of Nigeria’s (CBN’s) $1 billion foreign exchange allocation to manufacturers, stressing that the demand for forex by manufacturers by far outweighs what the apex bank had disbursed.
Exxon Mobil laid off additional 89 workers last week, part of a series of retrenchments that started in the company last year. The source revealed that 60 regular workers and 29 contract workers were affected in the latest retrenchment, involving mainly workers at the company’s Qua Iboe Terminal. According to NAN, the retrenched workers had been paid their terminal benefits running into millions of naira.
The Transmission Company of Nigeria (TCN) reported last week that Discos owed it about N107 billion as at December 2016. This amount is arrears for energy wheeled to the 11 Distribution Companies (Discos) and other electricity industry operators. Between January and December 2016, the Discos paid to TCN N28.9 billion from the total invoices of N90.8 billion leaving an outstanding N61.9 billion.
Domestic carrier, Air Peace announced last week that it had taken delivery of its 12th aircraft. The aircraft is a 114-capacity Boeing 737-500.While the likes of Aero and Arik seem to be facing major challenges, the likes of Med-View and Air Peace seem to be growing from strength to strength.
Money transfer company, Paga announced last week that it has gone into partnership with MoneyTrans, a leading Money Transfer company and TerraPay to launch cross-border remittances from Spain to mobile wallets in Nigeria’ said Nigerians in Spain can now send money to any mobile phone number in Nigeria through its platform, by visiting the nearest MoneyTrans store
The NCC las week announced that Spectranet 4G LTE was the Internet Service Provider (ISP) with the highest number of subscribers in the country. According to the NCC, Spectranet is leading with subscriber base of 193,892 among 14 other Internet Service Providers in Nigeria. We couldn’t find the data on the NCC’s website to substantiate this claim.
It looks like The Silverbird Group has reached some form of truce with AMCON and its receiver managers Messrs. M.A. Banire & Associate. The Vice President of the group, Guy Murray Bruce was in the papers last week, showing praises at AMCON and Messrs Banire for helping resolve its challenges in a fair, patriotic and businesslike manner. He however did not mention if they have finished repaying their loans or if they reached an agreement that perhaps included some form of loan restructuring or refinancing.
The Elizade Group have finally joined vehicle manufacturing in Nigeria. The announced that they will be into the production of Chinese brand, JAC. They are the authorised distributor of JAC Motors in Nigeria and are targeting to produce 15,000 vehicles annually, including, passenger cars, SUVs and light trucks. The plant, which is currently operating on a single shift is a multi-brand plant would also assemble the Toyota brand in Nigeria. the Managing Director, Elizade Nigeria Limited, Mr. Ademola Ade-Ojo said that the plant would have commenced operations earlier than now but for their inability to source foreign exchange for production. Mr Ojo also explained that the reason why they are yet to move production into CKD was because of the challenges of sourcing raw materials locally. According to him “Moving our production to CKD depends on how government ensures that the other factors key into ensuring that CKD strives. CKD cannot strive unless you have a minimum of about 30 per cent locally sourced material. “If you can’t source 30 per cent local content, there is no point in doing CKD. It depends on how government structures the auto market and the industry.”
Africa’s largest retail Supermarket chain, Shoprite Holdings released its 2016 full year results on Tuesday, showing headline earnings per share rose 15.5% to R45. Profits were also up 19% to R3.9 billion or N93.5 billion as sales from within and outside Africa strengthened during the year. Revenues were also up to R71.29 billion or N1.7 trillion. Revenues from Nigeria jumped up by 60% and 155% in Angola. Shoprite doesn’t reveal its numbers from Nigeria beyond these percentages. The company also claims local currency cash and short-term deposits of R1.3 billion about N31 billion are held in Angola and Nigeria. Shoprite also claims it has 3 million followers on social media, with more than 1.2 million of them in Nigeria. This is helping them extend expertise in digital marketing.Shoprite also revealed it now buys, depending on the time of year, almost 40% of its vegetable requirements from local growers in Nigeria
Barely six months after patriarch of the Ibru clan and billionaire, Michael Ibru passed on, peace seems to have eluded the Ibru family. Multiple court cases have been filed by his children over assets he left behind. Leading one camp of the family, is Oboden Ibru. Oboden Ibru is a former executive director of Oceanic Bank (now Ecobank) and Aero contractors (which has been taken over by AMCON). He has asked a federal high court to appoint an auditor to verify his late father’s assets and divide them equally among all 16 children. On the other side of the argument is Janet Ibru, who in a counter-suit wants beneficiaries of the estate to be those who scale through the results of a DNA test. She also seeks a refund of her expenses on their father in the last year of his life. While all these law suits fly around, various parts of the Ibru empire continue to suffer. Aero contractors are under AMCON control. Ikeja Hotels has made several losses for the last few years. Sun International, the operators of Federal Palace Hotel are also thought to have pulled out of their partnership with the Ibru Family. For a family with a long history of enterprise and industry, everything seems to be crumbling around them. It appears from a distance that the younger generation seem not to be ready to uphold the Ibru legacy.
The wave of mergers and acquisitions seem to be blowing in the insurance industry again. Liberty holdings, one of South Africa’s biggest financial service firms, has taken a stake in a Nigerian insurance firm. While Liberty has not mentioned the insurance firm, our sources suggest the firm could be Unic Insurance. Unic Insurance was established by prominent business man and one time head of the Interim National Government, Chief Ernest Shonekan in 1965. The company, started as a composite insurance firm, but has focused on health insurance since the 2007 insurance consolidation exercise. The deal, worth $12 million dollars, will see Liberty take a 75% stake in the firm. Audited results for the company in 2014, show the company having a loss after tax of 567 million naira. Unic is valued at about $1.9 billion as its share price remains stuck at 50kobo per share for years. Market value is different from purchase consideration upon acquisition
. The frequent appeals, and persuasion from the Federal Government to foreign airlines flying international routes may be paying of some dividends as at last Ethiopian Airlines has agreed to route flight through Kaduna airport with daily frequency with its Dream Liner aircraft. The Traffic and Sales Manager of the Airline Mrs. Firiehiwot Mekonnen disclosed this to journalists in Abuja after a closed-door meeting with the Minister of State, Aviation, Hadi Sirika and representatives of foreign airlines operating in the country.