This Corporate News Compilation for the week ended December 16th, 2017 is brought to you by Bluechip Technology Ltd Nigeria.
- Nigerian oil and gas company, Nadabo Energy Limited, got leave from the FHC to serve court proceeding against Trafigura Beheer B.V, out of jurisdiction, and five Nigerian companies that were alleged to have laundered N24 billion. We couldn’t get the back story on this though. So, it’s unclear what these allegations are actually about. But just as a flash back, in 2015 Nadabo was in the news some years back when the EFCC arraigned Abubakar Ali Peters, the CEO and the company at the Lagos State High Court, Ikeja on 21-count charge bordering on obtaining money under false pretence, diversion of Federal Government funds and forgery. According to EFCCC they allegedly obtained the sum N761,628,993.84 from the FG under the Petroleum Support Fund for the purpose of importing 16,808,064 litres of PMS but fraudulently imported only 7, 953,962 litres and diverted the rest of the product and its proceeds for personal use. Ali Peters was just 33 at the time. Trafigura also has a string of corruption cases against it from other countries where they operate.
- Ondo State’s plan to get its own state IPP got a major boost last week. The Federal Government and Kingline Power Limited signed a Power Purchase Agreement for the construction of 550 megawatts power plant worth $550m (N168.8bn at N307 to one dollar). In March 2015, NERC issued a power generation licence to the Ondo State Government and its partner, Kingline Development Company, a South Korean firm, to generate 550MW of electricity. The plan actually is for Kingline and Ondo State to construct a 1,100MW power plant. What I don’t get is why they are sending all that energy to the grid? The implication here is that upon completion, Ondo State people may not even get all that power generated in their state since the power is first going to the National Grid.
- I know GE news from Nigeria is mostly about signing MOUs rather than actually commissioning anything; Nevertheless, this news is quite important. Last week, GE signed a $26 million (about N9.360 billion) contract with Mainstream Energy Solutions Limited to begin overhaul of an 80 megawatts (mw) capacity turbine at Kainji hydropower plant in Niger state. Mainstream Energy are the owners of 922MW capacity generating Kainji and Jebba hydroelectric plants.
- The Insurance Industry was on overdrive last week after 577 of them submitted bids to secure lucrative insurance renewal contract for the corporation’s oil and non-oil assets. According to the NNPC, 245 brokers tendered for oil assets, 251 brokers for non-oil assets while 37 insurance companies tendered for oil assets and 44 for non-oil assets. Nigerian Insurance sector has a combined gross premium income of about N326 billion out of which N201 billion is Gross Premium Income for non-life. It’s interest how much influence the NNPC wields for a lot of industries.
- Sticking with Insurance, an interesting product was launched last week by Custodian and Allied Insurance Plc. The company now has a new insurance policy cover for anyone looking to insure against illnesses like cancer, stroke, heart attack, kidney failure. They called the cover Critical Illness Insurance Cover. According to them, you can buy this insurance as an employee ensuring that you get money to cover your medical bills should you God Forbid, have a terminal illness. They claimed the minimum sum assured is N1 million while the term is for 5 years. So basically, you’d probably get to pay around N50k annually to get this cover. I was surprised to learn no insurance company currently has the product. It will also be interesting to see how they manage risk with this product considering paucity of information about the health status of their insured. A bit like the pre-existing conditions the Americans argue about with Obamacare.
- Ecobank launched its own digital banking product last week, which it called Ecobank Xpress Account. Apparently, it’s basically their banking app allowing you to open an account with “no documentation”. As far as I know, products like these do have plenty restrictions such as how much you can deposit or transfer and who you can transfer to. I also don’t know who the target market is as most smart phone users probably have bank accounts. Nevertheless, it’s still a good product.
- Multichoice launched an APP for its installer last week. According to the company, is a management tool for assigning, monitoring, reviewing, troubleshooting and managing customer installations to ensure quality installation and better accountability? The APP is expected to enable dealers to assign jobs to accredited installers within a specific area. I am just imaging how beneficial an app like this could be to DISCOs and other Utilities.
- Naspers owned PayU launched its PayU receive product in Nigeria last week. The application basically allows you to send an invoice/reminder to your suppliers or clients via an email or SMS. The information contained in the email address or SMS will include the merchants debit card details.
- SureRemit, the Nigerian company and owners of SureGifts application announced that it will be launching its own ICO in January. According to the company, SureRemit allows users to buy its token which can then be used for remittances across countries. If I get this business model right, when you purchase their token, you can send it to a family member (say in Nigeria) which they can then use to pay for permissible bills or simply exchange for cash. SureRemit makes money out of this only by charging merchant a commission on transactions and then fees whenever the tokens are being converted to cash. It appears, remittances won’t attract any fee. I’m not sure how the authorities will see this product. By the way, here is a copy of their ICO white paper https://token.sureremit.co/SureRemit-WhitePaper-v.1.21.pdf
- Flourmills Nigeria Plc announced it was raising N39.9 billion via rights issues. The rights issues cost N27 per share and will be pre-allotted on the basis of 9 new shares for every 16 held. It just happens that 80% of the company is owned by just 100 people. Also, the chairman, Mr. John Coumantaros’s company, Excelsior Shipping Company owns about 53% of the company. So basically, the Greek American is injecting at least N25 billion into Flourmills by next year. Competition in the consumer goods sector has increased considerably this year, especially among food processing companies and millers. Dangote Flour is a big threat and has started stealing market share, Deli Foods, Dufil Prima, owners of Indomie have also secured billions in lines of credit.
- International Breweries Plc completed its 3-way merger last week and listed about 5,301,612,656 ordinary shares on the Nigerian Stock Exchange. The company CEO, Annabelle Degroot also had some warning for their competitors, Nigerian Breweries and Guinness. She claimed they have been chipping into their market share and will even become a larger threat by the time their $250 million Sagamu brewery is completed next year. She also confirmed that they are planning to introduce AB InBev’s global brands in the market to “have some fun and increase choice “. This beer wars will only get sweeter.
- A Port Harcourt based tech startup, Touchabl launched its mobile app also named “Touchabl” last week. According to the company, the App allows users to interact with images they find within the app. So, basically when you see something within an image and don’t know what it is or want to know more about it the apps explain it to you. A bit like a Shazam for images. The company CEO, Gabriel Eze, said they have also seen “uptake in Ghana, Kenya, Russia, Germany, Italy and the United Kingdom (UK) and “are focused on capturing the Nigerian market first, then expanding to other markets.” Their business model basically is to get users to purchase items they see in images. For example, if you see a shoe you like in an image, the app is supposed to tell you the make, price and where you can buy it. It was apparently launched in October. We looked it up on Google Play store and saw it only has 100+ downloads. Very small for all the plenty grammar.
- Tech Startup, Commissions.ng was in the news last week. They reported that they over 3000 products in its inventory made up of tangible items that fall into 50 different categories and intangible items like virtual top-up of recharge cards and will soon include cable and satellite TV bills, electricity bills etc. Their business model is actually what intrigued me. Unlike the e-commerce model where merchants place their products on market places such as Konga and Jumia these guys basically went in the opposite direction. Basically, they allow anyone who wishes to sell any product or service to sign up to their website. On signing up, they will give you a website, managed by you, products and services that you can sell and then you start selling for them. You make money by earning a commission on whatever you sell for them. I wonder if this model can ever scale.
- God is Good Motors, GIGM officially launched its mobile app last week. The company says with the app customers can book for trips online just the same way you can book for airline tickets. We got mixed reviews from a few guys who have used the app before. Some claim, it’s mostly unstable and that they just prefer going to their park physically to pay. Before now, they also allowed users make reservations via phone calls. It’s interesting how GIGM has been able to eat Luxury Bus owner’s launch. They used improved service, good drivers, better buses to beat luxury bus owners. Add to the fact that they get to their destination at relatively shorter time compared to luxury buses.
- Indonesian owned PT Timah and Topwide Ventures; a Nigerian company signed a JV agreement to jointly explore mining opportunities in Nigeria. Topwide Ventures is apparently owned by Senator Annie Okonkwo and is a vehicle he uses for most of his businesses. The company is more known for its skin care product lines, though I recall it signed a real estate deal with Anambra State Government, last year. How it has now morphed into mining is anyone’s guess.
- The Managing Director, Toyota Nigeria Limited, Mr Kunle Ade-Ojo announced last week that only 7,000 vehicles were sold in the first 9 months of this year, representing a 48% drop. According to him, from the importation point of view, there is a slight improvement because, in the first quarter, we had about 90% drop, but as of the third quarter, the drop had reduced to 62%. This compares to 14,500 last year. He also claimed Toyota as about 22% market share. It’s incredible how significant forex is to business sustainability in Nigeria. Just to add that, Toyota sold 1,900 units last year out of which 70% were pickup vans.
- Turkey’s biggest airport operator, TAV Havalimanlari AS otherwise known as TAV Airports Holding is currently putting plans together in other to bid for concession contracts for four airports in Nigeria, according sources. The Istanbul-based company has already submitted a non-binding bid for the airports, which include the MMIA in Lagos, the NAIA in Abuja, the Port Harcourt International Airport in Rivers State and the Aminu Kano International Airport in Kano. According to the sources, TAV Airports Holding is also considering capital expenditures in some of the four airports if it wins the contract.
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