This Corporate News Compilation for the week ended January 20th, 2018 is brought to you by Bluechip Technology Ltd Nigeria.

  1. We start of this week’s big stories with some sports news. Not what you might consider news, but we thought it was interesting to learn that Dana Air signed a “multimillion naira” sponsorship deal last week with Heartland Football Club of Owerri. The team just newly got promoted to the Nigerian Premier League. This is actually an important deal when you consider that kit sponsorship deals are very rare in Nigerian football not to talk of other sports. Just 3yrs ago Guiness signed the endorsement deals with Eyimba and 3SC with Dubic Beer. The quintet of Lobi Stars, Sunshine Stars, Rangers, Heartland and Dolphins had Harp as their sponsors. BUA Group sponsored Kano Pillars, in one of the more successful deals while ULO Consultants sponsors Sunshine Stars. Heartland’s latest deal is perhaps connected with the State Air career deal between the Imo State Government and Dana Air, which we reported sometime last year. Last January, Dana Air announced a partnership with the Imo State Government to form Imo Air.Image result for dana air sponsor heartland
  2. Sticking with sports, Coca-Cola Nigeria and the Nigerian Football Federation (NFF) announced a sponsorship deal for all the National Teams of Nigeria. The deal is reportedly worth around $4 million and is for a period of 5 years. Last September, the NFF signed a sponsorship deal with TGI Group, Tropical General Investments (TGI) Group, the parent company of WACOT Limited, Chi Limited and Hollandia Yoghurt as their Official Food Partner. The deal made WACOT Rice the official rice of the Super Eagles. They also signed a deal with PayPorte as the official online store partner of the NFF.Image result for coca cola to sponsor Nigerian football
  3. Reports emerged last week that Airtel had pulled out of its bid to acquire 9mobile complaining that “many things are not too plain with the entire process” The report also suggests Globacom and Helios Investment Partners LLP submitted bids but did not make any financial offer. This leaves Teleology Holdings Limited and Smile Telecoms Holdings Ltd who submitted bids of about $500 million and $300 million respectively. Whoever wins this bid will still be on the hook to pay for the loans owed to the Nigerian Banking Consortium of lenders. Image result for airtel pulls out of 9mobile
  4. Samsung revealed last week that it was not going to setup a manufacturing plant in Nigeria because its market share in the country is not big enough. This is despite being the company with the largest electronics products in Nigeria. The biggest smartphone maker in the world has a manufacturing plant in Vietnam, China, South Africa and Korea but none in Nigeria. It claims that of the 400 different components found in a mobile phone, none is available in Nigeria. Perhaps Samsung did not want to mention issues such as power, ease of doing business and government policy as major concerns.Image result for why samsung will not build plants in Nigeria
  5. Nigerian drug maker, Swiss Pharma Nigeria Limited (Swipha) announced last weekend that it was shutting down its operations “to safeguard its property and prevent any form of hostility following the industrial action embarked on by its workers.” The Swiss company was acquired by Biogaran, a subsidiary of Servier, a French Pharmaceutical Group saving the company from an imminent collapse. However, they soon ran into labour troubles after a Lebanese and former executive of Jagal Ltd, Gaby El Khoury was appointed MD. According to Gaby, “Management decided to restructure the organisation to ensure efficiency by removing superfluous staff and eventually align the firm with global best practices. “However, some of these policies appear to be unacceptable to some members of staff who preferred to slow down, then to hinder operation and embarked on strike since mid-December 2017 while all efforts to make them have a rethink about a promising future proved abortive.” Union members on the other hand claimed that he imposed harsh working conditions that contravened labour laws. For example, they claimed that “he imposed a new condition of service that states that any staff who leaves the company either through termination or resignation must not work in another pharmaceutical company for a period of one year.” They also claimed that he slashed salaries and leave days and also brought in about over 50 Jagal staff without following due process to head the HR department, Finance, Purchasing, Clearing and Forwarding, and Project Departments. Takeovers are always brutal, and it is high time Nigerian employees start to realise this. It’s unfortunate but that’s just how capitalism functions.Image result for swiss pharma Nigeria limited shut down operations
  6. Nigeria’s football legend, Kany Nwankwo was in the news last week crying for help. He claimed that his hotel, Hardley Suites, which is located in Victoria Island was being earmarked for sale “under a secret arrangement”. The property was put under the temporary possession of the Assets Management Corporation of Nigeria (AMCON) by an ex-parte order on account of a purported indebtedness. According to reports, sometime between 2008 and 2011, Skye Bank lent the hotel about N520 million with three blocks of the hotel as collateral as well as the personal guarantee of Kanu Nwankwo and his partner Ayoola Gam-Ikon. However, the loan was unpaid ballooning to a total principal including unpaid interest of about N924m as at 2015. AMCON took over the loan from Skye Bank and is now poised to sell the hotel to recover its money. The hotel began operations in 2005 with about 55 rooms and was said to be valued at N3 billion as it made about N40 million monthly. However, bad management and a downturn in the hospitality industry ravaged the viability of the hotel leading to loss of customers and revenue. A few years ago, kanu accused his partner Ayoola of Stealing, misappropriation and outright fraud against The Hardley Apartments Ltd (which they both jointly owned). Ayoola however got judgement dismissing the claims. One wonders what it is about hotels that Nigerians can’t seem to manage on their own. I haven’t seen a Nigerian owned hotel, managed by a Nigerian that has lasted over 5 years retaining the standard or higher. Pls share if you know one and don’t mention Eko Hotel.Image result for Kanu Nwankwo decries asset takeover
  7. A South African Company is yet again in the eye of the storm in corporate Nigeria. This time it is Shoprite, the Leading retail store chain in Nigeria. Now, this is an interesting short story. Nigerian firm, AIC Limited was awarded $10 million as damages against Shoprite Checkers (PTY), Limited and its Nigerian subsidiary, Retail Supermarkets Nigeria Limited for a breach of contract. The award was contained in a judgment delivered by Justice Lateef Lawal-Akapo of a Lagos High Court, Igbosere. AIC is owned by Chief Harry Akande. According to the excerpts of the case, AIC claimed that sometime in 1997, it conceived of the business idea of developing and establishing mega stores/ retail supermarkets in Nigeria similar to Shoprite Chain Store Supermarket in South Africa and Sainsbury Supermarket of the United Kingdom. According to AIC, this culminated into several meetings in Nigeria and in South Africa spanning 1997 and 1999 between both parties. AIC claimed they eventually signed a JV with Shoprite to exclusively operate and manage the first defendant’s Shoprite brand in Nigeria and elsewhere in the coast of West Africa except Ghana. Well, as we all know, Shoprite set up shop in Nigeria in 2005 under a different arrangement and with different partners and is now one of the largest supermarket chains. This is one case I will be following closely as it could impact heavily on future potential JVs and Technical Partnerships with foreign owned brands. South African firms have learnt a lot of lessons investing in Nigeria and I hope we are also learning too.Image result for Aic limited awarded for shoprite breach of contract
  8. Spar, a rival supermarket chain to Shoprite, announced last week that its customers can now have free Internet services in its stores nationwide. The project will begin in its Ilupeju branch and will be implemented across stores nationwide in the coming weeks. Apparently, the free Wifi service is being rolled out using KonneXion Wifi engine in partnership with Internet Solutions Nigeria Limited (ISN) and Melvic Gold Communications (MGC) who have ensured that service will be available to any shoppers using a smartphone, tablet or a laptop that has built-in Wi-Fi. In case you want to use this, it comes free for just 30 minutes and will require that you drop your email address and other personal information. Don’t be surprised if you are sent “unsolicited messages” from the supermarket
    Image result for spar offers free wifi
  9. Africa focused investment bank, Atlas Mara has upped its stake in tier two lender Union Bank to 48%. Prior to the rights issue, Atlas had a 42% stake. Union Bank recently concluded a N50 billion rights issue, which is 20% over subscribed. At 48% there is rising expectations that Atlas Mara may soon launch a takeover bid for the bank. Proceeds will be used to bolster its capital base and provide loans for emerging areas in the Nigerian economy. The bank’s share price is up 3.2% Year to date and is one of the weaker performers in the banking sector this year. A takeover bid may lead to a rally of its share price.
  10. First Bank announced last week that it has upgraded its internet banking website Firstonline. The website now has a new feel and allows its users to have tools such as self-verification for intercepted transactions, statement download in different file formats, multiple transactions with a single token entry, bills payment, creation and cancellation of standing orders or recurring transfers. First Bank just recently hit 10 million card users, only the second bank in Africa to hit that milestone.Image result for first bank upgrades its internet banking
  11. Ecobank Nigeria announced an increase in the maximum daily limit of its naira debit cards abroad “depending on the type of card held by its customers”. According to what we heard, customers with naira debit cards can now pay “up to $4,000 and $5,000 per day on online channels and point of sale (PoS) terminals respectively across the world.” I had to read that twice too. The report also added that foreign currency debit card holders can spend up to $5,000 daily from their domiciliary accounts. For Ecobank Premier Customers with Platinum Credit Cards, daily transaction limits of $15,000.00 apply. The only caveat we saw was that the limits were also subject to the Central Bank’s annual spending limits on naira and foreign currency denominated cards.Image result for ecobank announces increased transfer limit
  12. In good news to the new fathers out there, especially those who work in Access Bank, they can now have one week full of paternity leave. The bank announced this last week, indicating that fathers one-week leave will be a paid leave allowing fathers to spend time with their wives and new born child. However, the aspect of the news that surprised us was the part that mentioned surrogacy. According to the bank’s new policy, surrogacy or adoptive leave will attract full pay for three calendar months for female employees of the bank. “Furthermore, a pregnant employee who has been in the bank’s employment for 12 consecutive months also has the option of six calendar months’ maternity leave with two-thirds of full month pay, while the surrogacy or adoptive leave period is three calendar months with full pay or six calendar months leave with two-thirds of full month pay.” I understand unlike in some countries, Surrogacy is not illegal in Nigeria neither is it legacy as there are no laws or regulations around how it works.
  13. FCMB confirmed last week, that it was funded the new Radisson Blu hotel located in GRA Ikeja. The hotel, which was previous called Renaissance hotel is owned by the Avalon Intercontinental Hotel Group, who also own Protea Hotel Ikeja, Protea Hotel Victoria Island and Avalon Hotel, Offa, Kwara state. It is interesting to note that Executive Director, Avalon Intercontinental Nigeria Limited, Kazeem Tajudeen; Director Legal, Avalon Intercontinental Nigeria Limited, Olaitan Tajudeen; and Director of Projects Avalon Intercontinental Nigeria Limited, Ahmed Tajudeen are all members of the same family and are actively involved in the operations of the hotel.
  14. The Edo State Government announced last week that it has commenced discussion with the Nigerian Bottling Company about a power purchase agreement from the company’s Benin plant. According to its Governor, Godwin Obaseki, the deal will see NBC power government buildings and streets across Benin metropolis. NBC reportedly has about 6MW of installed power generating capacity and has an excess of about 2MW that it can sell to Edo State Government. Lagos State Government has a similar arrangement and has been off grid for years now, relying on the State’s IPP to power its offices and public utilities. ICYDK, major roads like the Third Mainland Bridge has steady power from street lights on the back of the states IPP.
  15. Sticking with Edo State, they also reached a deal with Sahara Energy to power public utilities in the state with flared gas. They plan to use the electricity generated from this deal to power street lights, schools and hospitals. The deal with require Sahara Energy to convert some of the gas being flared daily in the state into electricity. Sahara Group are also the owners of Nigeria’s largest power plant, Egnin Power Plant.
  16. Russian Oil firm, Lukoil has indicated interest in acquiring Petrobras stake in Nigeria’s oil fields in Akpo and Agbami. Petrobras owns 16% stake in the Akpo field and a 13% stake in the Agbami field. Akpo and Agbami are already producing fields. Petrobras announced last year that it was looking to sell its holdings in Petrobras Africa which has stakes in the two major Joint Ventures (JV) Akpo and Agbami. Two other shareholders of the African unit, Helios Investments and Grupo BTG Pactual E and P (a subsidiary of investment bank Grupo BTG Pactual SA) are also selling their stake. Petrobras is selling the stake as part of a wider asset divestment programme to reduce its debts. Image result for Petrobras Nigeria
  17. Last week, reports emerged that Phase3 Telecom company and Alheri Engineering limited were indebted to the federal government to the tune of N27.18 billion over a concession agreement with Transmission Company of Nigeria (TCN). Alhaji Aliko Dagote has interest in Alheru Engineering Limited. Phase 3 and Alheri have expectedly denied the claims contained in a letter purportedly sent to the Presidency by the office of the Minister of Power. Another report by Premium Times, also claimed that there was evidence of conflict of interest in the deal between Alheri and Phase 3 telecom. According to the online paper, “the concession agreements were entered into under circumstances of conflict of interest because Phase 3 is owned and managed by one Stanley Jegede, son-in-law to Mr. Adebayo, one time Nigerian minister of communications. Mr. Adebayo was in office as communications minister when the company obtained the long distance license.” It also reported that “Joseph Makoju who signed the agreement on behalf of NEPA (TCN) as its then Managing Director is now an executive officer in Dangote Group, owners of Alheri Engineering Company. He has equally signed letters on behalf of Alheri on the concession agreement. ” “Again, the Infrastructure Concession Regulatory Commission, ICRC, mediated between the TCN and the two concessionaires when issues of non-payment of fees arose. “‏ The former Director General of the commission, one Aminu Diko, was for several years an employee of Dangote group before he was appointed DG of the ICRC.” Do you see a conflict of interest in here or is this all just coincidence?
  18. The GMD of NNPC, Dr. Maikanti Baru revealed last week that it was in talks to engage the services of the guys who built the Kaduna, Warri and PH Refinery to help turnaround the refineries. He also inaugurated eight committees (yes, 8) charged with the express directive to return the refineries to their nameplate capacities by 2019. Here is Baru explaining the plan. “For a start, the corporation has gone back to the original refineries’ builders, which are the JGC Corporation of Japan for Port Harcourt Refinery, Italy-based Snamprogetti (owned by Saipem), for Warri Refinery and Japan-based Chyoda, for Kaduna Refinery.” Baru. Just in case, JGC and Chyoda posted an annual revenue of $7b and $6b in 2016. Please when will the government sell-off NNPC. That corporation is a disgrace.
  19. European oil trading company Vitol, has reportedly reached a $530 million deal with Nigeria’s Shoreline to finance an oilfield in exchange for access to some of the 50,000 barrels per day (bpd) of oil it produces. Shoreline is owned by Nigeria’s Kola kareem. Reports indicate that the agreement with Shoreline will provide the company with cash to refinance existing debt and further develop OML 30 in Nigeria’s oil-rich Delta region. The field currently produces 50,000 bpd and has an estimated 1 billion barrels of oil reserves. Shoreline has a 45 percent interest in the field. Kola Kareem had in 2016 revealed that his company will now be raising funds via bonds, until oil price was above $60 and the unrest in the Nigeria Delta recedes.
  20. Dangote Industries Ltd announced that it had signed a deal with Mammoet, a Netherlands-based engineered heavy lifting and transport specialist. The Dutch company will be transporting, lifting, and installing all over-dimensional components for Dangote’s 650,000 bpd multi-billion-dollar refinery being built by the Dangote Group of Companies. It will be interesting to see the list of consultants, professionals, contractors both foreign and local working on this huge project. Anyone thinks Dangote Group’s website needs a makeover? That website is not befitting. You developers should send them a proposal.
    Image result for Dangote Industries Ltd announced that it had signed a deal with Mammoet