This Corporate News Compilation for the week ended November, 25th 2017 is brought to you by Bluechip Technology Ltd Nigeria.
- There was big news in the Medical Diagnostic Services sub-sector of the Healthcare sector last week. Synlab, a leading European provider medical diagnostic service announced the acquisition of a majority stake in PathCare Nigeria Ltd. Earlier in the year, the Nigerian owners of PathCare Nigeria reacquired 26% of the shares owned by its previous parent company, PathCare South Africa. By acquiring a majority stake in PathCare, Synlab has gained in roads into Africa’s biggest market. The clinical diagnosis market is still fragmented with no clear winner at the moment. Most Nigerians still resort to small clinical laps for medical diagnosis. However, the likes of PathCare, Mecure and Union Diagnostics are more well-known brands. It is likely that PathCare might soon change its name to Synlab. Synlab started in Germany and post revenues of about $1.7billion. Interestingly, Civen, the Private Equity Firm that owns Synlab also had a stake in Allegro and E-commerce company based in Poland.
- A Nigerian company, Environfocus scored a major win last week. The company announced that it now has distribution rights to LifeStraw, a product used for preventing water borne diseases. LifeStraw is owned by Vestergaard and started mass producing LifeStraw in 2005. The product was initially produced to help filter guinea worm from water but has now been adapted for use in various forms. Vestergard doesn’t have an office in Nigeria but has one in Kenya.
- So, the race for who will acquire 9 Mobile is still on. Last week, we heard the list of potential buyers has been reduced to 10 from 16. According to reports, some of the bidders include Globacom, Airtel, Dangote Telecoms, Alheru Eng Ltd, Smile Telecoms, Helios, Centricus Capital and Africell, Abraaj Capital, Africa Capital Alliance, Carlyle Group. 9Mobile which still considers itself viable reported that it has an ARPU of N937 as at June 2017. This compares to MTN’s N1.1k as at March 2017. Their problems have mostly been cash. It currently has a negative working capital of about N162b and another N262 billion in long term debt. In fact, its external debt was N1.5 trillion when banks threatened a takeover, however, Etisalat UAE decided to convert shareholder loans of N1.3 trillion into equity. From what I was privy to see, the company has a negative shareholder fund of about N216 billion and a negative retained earnings of N1.4 trillion. Share capital and share premium is just under N10billion.
- In related news, the CBN Governor also reiterated again that a 9Mobile will be sold by year end and that it was determined to ensure creditors don’t “dismember” the company. There has also been charter that various factions looking to buy the company have been working on their lobbyist both at the CBN and NCC. Some banks have complained that the regulators seem to wield a bit more influence than they would have preferred which is frustrating other serious investors. In fact, they rumoured that’s what Barclays threatened to pull out last week.
- German Manufacturer, Bosch revealed that it has concluded plans to expand business operations in Nigeria in the next three years. Apparently, the management of the company was wowed last year when they visited Eko Atlantic City sensing that they could sell some of their security systems, household appliances, and power tools. They are currently very strong on automobiles.
- Remember GeoFluids? Well the drilling company is facing a petition for it to be wound up over a debt of $265.4k. The petitioner is one Eunisell Limited, the company that is currently the shirt sponsors of Rivers United Football Club.
- Investec, has exited its stake in Nigeria’s Daraju Industries Ltd. Daraju are the makers of MyMy, Rana, Fressia, Farha, Liby, and Green. Investec, sold the stake back to Ashwah Holdings, a Mauritius based firm with links to Sanjeev Gupta. Daraju was founded by Indian, Peeyush Garg. “Plenty deals this year in Nigeria”
- The debt squabble between Ecobank and Vigeo took another turn last week, after a Federal High Court in Lagos restrained Mr Victor Osibodu and his company Vigeo limited from accessing about N8.7 billion kept in about 17 commercial banks in Nigeria pending the determination of a claim suit filed against them by Ecobank. This is over a debt that Vigeo allegedly collected and restructured at various times since 2008. Ecobank is claiming that Osibodu has been liquidating his shares and other assets after realising that Ecobank was about seizing its assets.
- A Federal High court authorized GTB to take over the assets of Hi-Nutrient International Limited. The company is reportedly owned by a former governor of Oyo State, Chief Rashidi Ladoja. The company customizes manufactures and supplies Vitamin and Mineral. Premixes to the Livestock Industries, most especially to Poultry, Aquaculture and Cattle Farms in Nigeria and some ECOWAS Countries. According to reports, they owe GTB about N207 million in unpaid loans. For those who know, Segun Agbaje, they said he is unforgiving when it comes to non-performing loans owed by the so called rich men in Nigeria. But it is shameful that some of the so called rich men in Nigeria are chronic debtors. The annoying part is why they don’t like to pay down their loans.
- Lekki Concession Company Limited (LCC) reported its own fare share of employee theft after it sacked about 17 of its employees for defrauding the company of cash of just N182.451. Apparently, its toll officers under classify several vehicles thus robbing LCC off cash that was due to it. For example, instead of recording that an SUV passed, it records a Salon car.
- Unilever has concluded its right issue, after it successfully raised a whopping N59 billion. The interesting part of this is that its parent company, Unilever UK provided about N35 billion of that money in cash. Unilever UK owns about 60% of the equity of its Nigerian Subsidiary and wanted to increase its stake to as much as 75%. The inflow of about $97m should also be a boost to Nigeria’s external reserves.
- In some good news to the people of Ilorin, the Vice President Osinbajo inaugurated a Cashew Processing Factory in the Kwara State Capital. The factory is owned by FoodPro which was founded by Mr. Ayo Olajiga. Ayo co-founded Food-Pro in 2010 after working for Mckinsey and First Rand. The Factory can produce 5,000 tonnes of processed cashew nuts per year and is said to employ about 400 staff out of which 90% are women.
- Another good news, this time for Nigerian beer drinkers and in contrast, maybe bad for competitors. International Breweries announced last week that it will be introducing Budweiser to Nigeria. The popular American beer. The beer often dubbed “king of beers” is owned by the world’s largest brewer, Anheuser-Busch InBev. Anheuser-Busch InBev which last year merged with SAB Miller of South Africa also own International Breweries. The company has said it is investing in its fourth brewery, somewhere in Sagamu. It claims this will be its largest brewery outside of South Africa.
- In related news, International Breweries is also merging with Intafact Breweries Ltd (based in Onitsha), and Pabod Breweries Ltd (based in Port Harcourt) – all subsidiaries of AB InBev. Intafact sells Hero Larger and has its largest installed capacity in Nigeria with 2.7 million hectoliters. International Brewery share price is up 210% in the last one year and is one of the best performing stocks.
- Nigeria’s e-commerce sector got a new member after Afrilux launched an online store for cosmetics. The company said it has listed about 17,000 products from 500 brands in this vertical and will be selling all “sorts of cosmetic from the lowest to the highest”. 15. Nigeria’s e-commerce sector got a new member after Afrilux launched an online store for cosmetics. The company said it has listed about 17,000 products from 500 brands in this vertical and will be selling all “sorts of cosmetic from the lowest to the highest”. It claimed some of the 17,000 products include cologne, perfumes, Gucci, Revlon and American Crew from about 500 brands. The Managing Director and Chief Executive Officer, Afrilux Nigeria, Mr. Jack Ikwueme said the “brain company is in Spain” and that “it was hard convincing the company to establish in Nigeria.
- The NNPC and Chevron announced last week that they have raised the second tranche of their $780 million facility. The JV had in August borrowed about $400m from Nigerian banks and thus got this second tranche of $380 million from International lenders. NNPC owns about $468 million of the loans while the balance is to Chevron. The loans will be used to finance the completion of the Sonam non-associated gas (NAG) well platform and Sonam living quarters platform, drilling of seven wells in the Sonam field and the Okan 30E NAG. It’s expected to increase Nigeria’s crude oil production by 39,000 barrels per day and increase gas production by 283 million standard cubic feet per day (mmscfd).
- Shell announced that it paid Nigerian companies about $740 million for contracts in 2016. It also claimed it has paid the Nigerian Government about $1.4 billion in royalties and corporate taxes, and another $106.8 million contribution made to the Niger Delta Development Company (NDDC). corporate taxes, and another $106.8 million contributions made to the Niger Delta Development Company (NDDC).
- Geogrid LighTec Limited, an independent power generation company, and the Manufacturers Association of Nigeria (MAN) have signed a Memorandum of Understanding for the delivery of 10MW of embedded generation within the Ikeja industrial cluster. MAN has been at logger head with DisCos over the implementation of MYTO 2015 which increased their tariffs. Geogrid plans to deliver 10mw of supply to MAN. MAN said they were looking forward to the deal as it is important that they get power at a “reasonable cost”.
Africa’s largest telecoms firm, MTN, to divest from its Middle East operations
The MTN Group is in advanced talks to sell its stake in MTN Syria to the minority shareholder.
Africa’s largest telecoms firm, the MTN Group, has announced its plans to exit the Middle East. This is part of the wireless carrier’s strategic plan to shift focus entirely to its home continent, Africa.
The mobile operator said that as part of its medium-term strategy, it will be leaving the Middle East, starting with the sales of its 75% stake in MTN Syria. Overly reduced revenue from war-torn Syria and the complex nature of the operating environment in the country are part of the reasons MTN is divesting.
MTN’s Chief Executive Officer, Rob Shuter, noted during a conference call with reporters, that “the Middle East environment is becoming increasingly complex and it contributes less to the group’s earnings.’’
Shuter disclosed that the disposals in the Middle East region will be done in a phased manner, with its 3 consolidated subsidiaries in Yemen, Afghanistan, and Syria earmarked to be sold first. These markets only contribute about 4% to the group’s earnings before interest, depreciation, taxation, and amortization.
The MTN Group is in advanced talks to sell its stake in MTN Syria to the minority shareholder, TeleInvest, who has 25% stake in the firm, according to the CEO. He believes that the telecoms firm is better served to focus on its Pan-African strategy and simplify its portfolio by leaving the Middle East region in an orderly manner.
In the medium term, the group will also dispose of its 49% stake in MTN Irancell, one of its largest markets.
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The South African firm plans to exit the entire portfolio in time, which will then leave it with 17 subsidiaries in Africa.
Just yesterday, Nairametrics reported about MTN’s plan to sell its stake in Jumia Technologies. MTN will also be divesting from telecommunications infrastructure firm, IHS Towers. The divestments from Jumia and IHS Towers were informed by the decision to raise funds in order to reduce MTN’s debts. It will also help the company to refocus its operations.
Airtel and Telkom discontinue merger plans
The disclosure was made in a notification that was sent to the Nigerian Stock Exchange.
Telecoms giant Airtel Africa Plc and Telkom Kenya Ltd have decided to discontinue the completion of their merger plans due to the lengthy process of the transaction which has been on since February 2019.
The two telecom firms resolved not to complete the business combination despite their respective efforts to reach a successful closure and having it drag on for a while.
The disclosure was made in a notification that was sent to the Nigerian Stock Exchange (NSE) by Airtel Africa and signed by its Group Company Secretary, Simon O’Hara, on Wednesday, August 5, 2020.
A subsidiary of Airtel Africa Plc, Airtel Networks Kenya Limited and Telkom Kenya Limited, in collaboration with other parties, had entered into an agreement on February 2019 to combine their businesses in Kenya, so as to create an integrated telecommunications platform with mobile, enterprise and wholesale divisions.
Airtel Africa Plc in its statement said, ‘’Airtel Networks Kenya Limited (Airtel Kenya), an Airtel Africa Plc subsidiary, and Telkom Kenya Limited (Telkom) amongst other parties, had entered into an agreement dated 8th February, 2019 to combine their businesses in Kenya, so as to create an integrated telecommunications platform with mobile, enterprise, and wholesale divisions.’’
‘’The completion of the business combination was subject to the satisfaction of various conditions precedent, including regulatory approvals.
“Despite Airtel Africa Plc and Telkom respective endeavours to reach a successful closure, the transaction has gone through a very lengthy process which has led the parties to reconsider their stance. Accordingly, Airtel Africa Plc and Telkom have decided to no longer pursue completion of the Transaction.’’
In his own reaction, the Chief Executive Officer of Airtel Africa Plc, Raghunath Mandava, said that Kenya was a large and growing market and stressed on the commitment of Airtel Africa to build a growing profitable business.
He disclosed that the telecoms giant currently serves over 14 million Kenyan customers, a number that is growing every month. He pointed out that the revenue numbers were up double-digit in constant currency in Kenya in the last quarter.
The Airtel boss reiterated the strategy of the firm is to focus on winning more customers, invest in a best in class voice and data network and progressively expand their mobile money business, will continue to build on these results in order to deliver against the opportunities the Kenyan market has to offer.
Airtel Africa is a leading provider of telecommunications and mobile money services with a presence in 14 countries in Africa primarily in East Africa and Central and West Africa.
Austin Avuru retires as CEO of Seplat petroleum, to receive huge benefits
According to the notice, Avuru will be considered a “good leaver” on his retirement.
Co-founder and Chief Executive Officer of Seplat Petroleum Development Company Plc, Austin Avuru has retired as CEO of the company, but will remain on the board as a Non-Executive Director.
According to a notice sent to the Nigerian Stock Exchange and signed by the company secretary Mrs Edith Onwuchekwa, the resignation took effect on July 31, 2020.
What this means
According to the notice, Avuru will be considered a “good leaver” on his retirement and receive his remuneration and benefits as such.
The Remuneration Committee has confirmed that Avuru will receive “a lump sum payment in lieu of notice equal to his salary, benefits, and pension allowance until November 18, 2020” as well as other security and travel benefits.
He would also receive a loss of office payment equal to 12 months’ salary, as compensation and in accordance with the Nigerian market practice.
In line with the provisions of the Directors’ Remuneration Policy approved by shareholders of the Company at its 2018 AGM, he will also receive a pro-rata bonus (in cash) to reflect his time as CEO during the financial year, and same “will be provided in the Company’s Directors Remuneration Report for 2020 and subsequent years”.
Seplat will also vest awards made in form of deferred shares in 2019 and 2020 at the normal vesting dates, and subject to the achievement of the relevant performance conditions, and Avuru will be subject to the post-employment shareholding requirement for two years.
The company management and board appreciated Avuru for his ‘excellent leadership’ in growing the company to become a notable player in the Nigerian and wider African hydrocarbon industry.
On November 18 2019, Seplat Petroleum Development Company Plc announced that Mr Austin Avuru will be retiring as CEO at the end of July 2020.
This is in line with Avuru’s earlier plans to retire sometime around his 62nd birthday.
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