This Corporate News Compilation for the week ended January 13th, 2018 is brought to you by Bluechip Technology Ltd Nigeria.
- A new twist emerged in the 9Mobile/Etisalat story after the Federal High Court in Ikoyi on Friday nullified the ex parte order approving the appointment of an interim board for Emerging Markets Telecommunications Service, EMTS, the owners of 9Mobile. Spectrum Wireless, one of the shareholders of EMTS had requested that the court nullify the appointment of the new board. Spectrum also claimed that the order obtained to constitute the interim board and executive management (which was done in June 2017) was obtained “by misrepresentation of facts that alienated its interests in the EMTS.” The nullification followed dismissal of the Preliminary Objection filed by United Capital Trustees Ltd in response to the application by Spectrum Wireless. Spectrum’s application was for a nullification of the ex parte order by Justice Ibrahim Buba of the Federal High Court.
- Still on 9Mobile, Globacom finally came out to debunk rumours that it had acquired 9 Mobile. It appears that they issued a press release debunking this sale, albeit after the rumour had been allowed to swirl for about 24 hours.“We are bound by the terms of the acquisition process as stipulated by the authorities handling it and we will not in any way sway or deviate from the rules.“We repose confidence in Barclays Africa, the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria which are handling the process that will lead to the emergence of a new owner for the company. “Globacom urges all stakeholders and, indeed, the Nigerian public to disregard the report.” Can the rumours die now?
- Spectranet announced last week that the NCC had adjudged it the leading Internet Service Provider (ISP) in Nigeria. It cited an industry report (which I am yet to see) as its source. According to Spectranet, the report claims “it has nearly 50 per cent of the customer market share comprising Small and Medium Enterprises (SMEs) and Nigerian households.” Undated Stats on the website of the NCC puts Spectranet customers at about 193,982 with about 108,629 active. The closest to it was Smile with 156, 243 customer.
- MTN reported last week that is now has 5G capabilities after successfully testing it. The company claims the technology is at least 100 times faster than 4G. MTN hopes to deploy the technology in Nigeria were it currently has a 4G license. It’s interesting to note that MTN does not have a 4G license in South Africa. Reports indicate South Africa is yet to issue 4G licenses.
- Jumia announced that it is introducing stricter compliance rules for all its vendors, which will include stringent fines for non-compliance. According to the company’s CEO, Juliet Anammah , the new measures include: Shipping of orders within 48 hours; Listing of only genuine products on the Jumia platform; Never going out of stock, among others. Fines for non-compliance would be N2,500 fine for shipping items late, N50,000 fine for shipping counterfeit items, N2,500 maximum fine for items going out of stock. Jumia also gave special recognition to its super vendors, HAYAT, Oneway Collections, Opeyemi Foods, Best Price Technologies, House of Oge, H&N Couture, Frieslandcampina Pplc, Delight Price, Affordable Luxury and Fashionholic who saw sales increase 600% in 2017.
- Just as we expected, the InterContinental Hotels Group Plc announced its withdrawal of its name and branding rights with the Milan Group. The 358 room Intercontinental Hotel Lagos, which is owned by the Milan Group has been struggling to meet up with payments of its Management Fees, which cost it about N40 million per month. Recall, a court gave Skye Bank (AMCON) powers to take over the company after the Milan Group failed to meet up with the payment obligation of its N30 billion loan. Brand Consultants and Service providers should have their marketing teams drawing up proposals as the exit of IHG means the hotel will now have to change its brand name including logos on all its furniture and fittings, ID cards, branding materials, bed sheets, insignias etc.
- Still on hotels, as Intercontinental bids Nigeria Goodbye, Radisson Blu seems to be expanding its tentacles. The hotel operator announced the opening of its third hotel to open in Nigeria and its second in Lagos. The third hotel is the impressive Renaissance Hotel in GRA Ikeja which will now be called Radisson Blu Hotel Lagos Ikeja. The hotel has about 155 rooms. Raddison now follows Protea, Sheraton and Hilton as foreign brand hotel operators with more than 3 branded hotels in Nigeria.
- Kenyan owned marketing communications firm WPP Scangroup will be launching an advertising joint venture in Nigeria. The company has been trying to make inroads into Africa’s largest economy but had a court case which was blocking its entry. It reported that It has settled the court case and cannot commence operations in Nigeria. According to the company it will be own 24.9% of a JV with a Nigerian company. The JV will be the vehicle for its operations in Nigeria.
- In perhaps the first major corporate deal this year, Milost Global announced that it has closed the acquisition of Primewaterview Holdings Nigeria Limited. Primewaterview is one of the biggest indigenous real estate development companies in Nigeria. Milost revealed together with its African subsidiary, Isilo Capital Partners (Pty) Ltd, it has closed the acquisition of a 100% interest in Primewaterview Holdings Nigeria for a total consideration of $1.1 billion. Primewaterview doesn’t just own portfolio in Real Estate, it also large scale, diversified holding company with a portfolio of Oil & Gas, Quarry Mining, Healthcare and Power. Other details of the deal reveal Milost and Isilo Capital Partners will start to earn almost immediately with Primewater’s stable revenue streams expected to contribute 10% accretion to Milost FFO on a run-rate basis. Primewaterview is Milost’s first meaningful investment in Nigeria. HRH Prince Adetunji Ogunwusi (elder brother of the Ooni of Ife) and his partners, previously owned Primewaterview. The company is currently developing a 2000 bed Medical City project which is going in construction at the end of the first quarter of 2018 along with the tallest building project in Africa.
- Nigerian owned company, Eta Zuma West Africa Group announced that it has inaugurated the production and sale of coal briquettes as alternative fuel for home use. The company’s Group Managing Director, Mr. Innocent Ezuma, said at the inauguration of the plant in Ankpa, Kogi State that the factory would produce 2,000 tonnes of coal briquettes a month. The company explains that the coal briquettes are used on specially designed stoves to eliminate soot and smoke as well as provide focused and efficient heat for domestic cooking. Ezuma also said contract had been awarded for the expansion of the factory to handle the production of additional 10,000 tonnes of coal briquettes. In an interesting interview, Ezuma explained that a total of $30m would be spent to set up full capacity for production of 57,000 tonnes of briquettes per annum. He also explained some interesting challenges they faced with the technology. Let’s quote him verbatim“We started this project about five years ago. Within this period, we have invested about $6m. We thank God that today; we are seeing the fruit of our labour. The machines were specially made. Coal is an abrasive material but by special technology, we now have it bound together. Coal is like sand. It does not cleave together. We needed some organic mineral materials to bind it. We did a lot of research to come to this perfect mix. “We can source the minerals locally; but for us to start, we had to import the binders.
- We have some good news for Kia owners. Kia Motors Nigeria has teamed up with Cars45, to provide a pre-owned car sales and Trade-in programme for all Kia cars. The partnership basically allows Kia owners to trade-in their Kia cars for an all-new Kia car or an outright sale of a used Kia car with an immediate payment. This arrangement probably favours KIA a lot more considering that the second-hand value of Korean cars pales in comparison to Japanese cars.
- First Bank announced last week that it will set aside N15bn loan budget for schools nationwide. The bank said the educational products and solutions include the FirstEdu Loan, Operational Vehicle Loan, Term Loans for constructing new sites and renovation of existing sites, Personal Loan against Salary (PLAS) and Salary Overdraft (SODA) which enhances Parents/Guardians’ capacity to pay their wards’ school fees. The FirstEdu loan is targeted at private Nursery, Secondary and A-Levels schools. The bank did not reveal what the interest rate for these loans will be. It’s an interesting product for an industry that attracts a reliable and easily understandable stream of cash flows. With the right pricing, this could be a very good product for the bank.
- United Bank for Africa (UBA) Plc has launched a chat banking personality named Leo that enables its customers make use of their social media accounts to carry out key banking transactions. Customers of the bank can make use of Facebook chat function to enjoy banking services through chat sessions. Also, users would be able to perform other transactions using the chat banking; including payments of bills, data top-up, mini-statements, loan applications; cheque confirmation, account freezing, open new accounts, receive instant transaction notifications, check their balances on the go, transfers and airtime top up. This basically rides on Facebook’s chat bot technology, something that is being increasingly adopted by corporates.
- The Nigerian Stock Exchange (NSE) has suspended trading in the shares of 7UP Nigeria Plc. The suspension paves the way for the takeover bid by Affleka holdings. Recall some weeks back we reported that Affleka Holdings was set to takeover 7up. The deal will eventually lead to the delisting of the company from the NSE. Delisting a stock means it will no longer trade on the Nigerian Stock Exchange. Affleka holdings is owned by the El-Khalil family which founded the company. Affelka SA, the majority shareholder in 7-UP Plc, had proposed to buy out the 171,542,574 ordinary shares of 50 kobo each representing the 26.78% of the company’s issued share capital that it does not own at N112.70 per share. In a notice sent to the Nigerian Stock Exchange (NSE) this week, Affelka SA the majority shareholder in 7-UP Plc revised its offer for all the shares it does not own to N125 per share. The revised offer was at a 22.6% premium to the last traded share price of the company on January 9 2018 and a premium to the 27.6% premium to the August 10, 2017 which was the last date prior to the announcement of the proposal by Affleka.
- In case you did not know, Nigeria has its own Cryptocurrency Company. SureRemit which we mentioned here last year has launched its ICO on its website Recall we explained that the company developed a crypto token which with a specific purpose; allowing immigrants a quick, safe means to send non-cash value to their family and friends, at zero transaction cost. Interesting to note that global remittances was $429 billion and most of it went through MoneyGram and Western Union remittances in Sub Saharan Africa was about $33b. Nigeria made up over half this amount with about $19b and was 6th overall globally. SureRemit just needs to acquire about 10% of this inflow to be a force in the financial services sector.
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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