Sun International, a hotel and gaming group has closed shop in Nigeria, reports Nqobile Dludla of Reuters. This continues the worrying trend of multinational companies shutting down their operations in the country. Tiger Brands and Woolworths are other multinationals that have recently quit operations in Nigeria.
As with several of the previous exits, the weakening currency, economic recession and security challenges were named as prime reasons for their decision to quit.
However, contentions have run rife between Sun International and the Ibru family, another shareholder, creating a peculiar problem that Reuters reports as ‘at least as important in its [Sun International] decision to leave’. Sun International had earlier on acquired 49% stake in Tourist Company of Nigeria to become the company’s largest shareholder but the disputes have negatively affected the operation.
To compound matters, the EFCC in January opened investigations into the investment. This situation seems to have affected the company’s fortunes as it reported a 20 percent fall in diluted adjusted headline earnings per share (AHEPS) to 628 cents for the year to June.
However, Sun International’s CEO Graeme Stephens noted that Nigeria was not an exception, as the company had been systematically exiting Africa and thus disposing its interests in all African countries.
In another development, Standard Chartered has restructured its African private equity team from eleven members last year to five, reports two private equity sources close to Standard Chartered’s fund.
In another development, the head of the African fund, Peter Baird has been replaced with Ronald Tamile, while Yemi Osindero, head of Standard Chartered’s West Africa private equity business, is also leaving the bank, along with his colleague Nana Dankwa, to start an independent African fund.
‘This is part of a strategy to be leaner, more efficient and more integrated… Our portfolio in Africa is in very strong shape. Africa remains a key part of our strategy’ CEO of Standard Chartered Private Equity Joe Stevens told Reuters.
Standard Chartered Africa’s Investments include Union Bank whose share price has reduced by almost 50% within about 7 months.
Follow the rest of the story from Reuters