Business
Corporate News Roundup for the week ended March 3, 2018
This Corporate News Compilation for the week ended March 3rd, 2018 is brought to you by Bluechip Technology Ltd Nigeria.
1. Google announced last week that it has veered into the Jobs/Career listing Market.
Before you start to shudder, they revealed they will be working Job sites like Jobberman, NG Careers MyJobMag and other job resource websites in Nigeria to help optimize the service.According to Google, it will be introducing a new Jobs search function that allows job seekers to find employment opportunities.
Here is Google’s Country Manager Director, Juliet Chiazor on the development “Finding employment is still very difficult for many people. This new job search experience will help the millions of Nigerians searching for new opportunities. We believe that the web allows anyone, anywhere, of any age, to grow their business, learn the skills they need to get a job, to grow in their career, become an entrepreneur or developer. This new job search tool will be a key driver for connecting job seekers to open opportunities, helping more people to grow with Google.”
Google knows everything, even when you are jobless and looking for work. Incredible data these guys have on all of us.
2. If you are one of those guys looking to buy stocks of Facebook, Snapchat, Google then this next story should interest you. Eagle Global Markets (EGM), a Fintech company based in Lagos announced last week that it has “a seamless, hassle-free opportunity” for Nigerians “to trade on more than 1,000 global markets financial products, using the Naira.”
Yes, using Naira. According to its Co-Founder Gbite Oduneye, “We have two platforms: the ‘Naira Cloudtrade’ and then the US Dollar MT4, which is the only one other players in the industry offer to their clients. EGM makes the investing world a much smaller place by breaking down barriers, making it possible for Nigerians to trade more than 1000 financial products with Naira.”
Gbite also revealed that with the EGM platforms, investors and traders can trade on a wide range of instruments “ranging from international equities, commodities such as crude oil, gold and silver; indices, currency pairs and derivatives of global companies such as Facebook, Google and Snapchat, among others.”
I wonder who takes the exchange rate risk here? Interesting to note that this business model includes commissions on the trade, licensing for the software that you used for the trade and more importantly training. Sold business model if you ask me. Just mind the risk if you are an intending investor.
- Remember Vconnect? Ok just kidding. To be candid, I have always wondered what their business model is but this latest tie-up with True Caller was quite revealing.
Truecaller, last week announced a partnership with VConnect, which will see Truecaller integrate VConnect’s Business directory to its app. It claims this allows users to efficiently identify VConnect’s service providers.
This is not the first, as last year, True Caller also launched a product with VConnect that allows SME’s to quickly identify if a call is a potential prospect. Despite being Africa’s largest market, TrueCaller revealed it will be setting up headquarters in Nairobi and has recruited Zakaria Hersi as Director of Partnerships for Africa. Zakaria helped Swedish Investment firm Kinnevik, launch Saltside in Nigeria where he was the MD
4. Safeonline Fintech announced last week that it has launched a product that will “save eCommerce in the country.”
In a quite convoluted press release, the Head of Product, Safeonline fintech, Abraham Ezeadiebuo, said the initial goal was to provide a seamless replenishment process for retail outlets selling basic amenities needed by the consumer populace.
“It was to ensure only entities responsible for the movement of goods were left as the sole middlemen fostering direct relationship between Retailers and Manufacturers However, our solution provides a robust system that could effectively manage to split of funds across the numerous partners needed to ship goods and a trigger mechanism to confirm successful delivery to process compensation for the haulage operator in real-time.”
I really struggled to understand what these guys are offering and wonder why press releases can’t be made simpler. If you do, kindly help. I also got a bit confused as the Safeonline I knew before now was a Digital Security outfit powered by CcHub and OSIWA.
5. Last week, the Central Bank of Nigeria issued a statement reiterating that cryptocurrencies are not a legal tender and as such are illegal.
This is the strongest against cryptocurrencies made this year from the CBN. In a circular dated February 28th, 2018 and published on its website, the apex bank reiterated that “cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and Exchanges such as NairaEx are not licensed or regulated by the CBN.”
Nairaex is a top Cryptocurrency exchange in Nigeria & is the number one marketplace for trading bitcoins in Nigeria. It’s unlikely this announcement will deter crypto investors in Nigeria but Nairaex will have to take this seriously if it wants to continue to operate in Nigeria. You do not want regulators beaming a searchlight on you. Nairaex is running by a company called Double JJ Enterprises. Not a lot is known about them publicly.
6. Farmcrowdy, “Nigeria’s first and leading digital agriculture platform” which allows Nigerians to venture in and sponsor agriculture, last week announced that it had received a $325,000 grant from dedicated GSMA global team Mobile for Development as part of the GSMA Ecosystem Accelerator Innovation Fund.
The award was granted at the Mobile World Congress 2018 in Barcelona, Spain. The grant will allow the startup to develop a mobile app for smartphones and feature phones that will enable farmers and Technical Field Specialists interact with farm-related activities. We have discussed Farmcrowdy a few times on this thread.
Other recipients of the 2017 equity-free grant award include Nigerian e-learning platform PrepClass, Ugandan Fintech startup Ensibuuko and online payment platform LipaMobile, Tanzanian Micro-Health Insurance product Jammi Africa, Kenyan education mobile platform Kytabu and Optimetriks, Zambian Musanga Logistics, Egyptian Carpooling app Raye7 and multinational knowledge-based network, Lynk.
PrepClass is a home tutoring service that offers quick test-taking strategies and targeted examination practice for students. They also provide access to personal home tutors trained to meet your academic needs. It’s like an Uber for home tutoring. Startups are seriously picking cash in this economy, stay Woke!
7. So, we got more insights into the much awaited MTN Public Offer following a Reuters report. According to Reuters, who claimed they saw documents pertaining to the MTN listing and IPO, the company intends raising $400m from the IPO of its Nigerian subsidiary.
According to the report, MTN will list 20 billion shares after a 1 for 5 share split, following which it will then proceed to pick the IPO price through book building. Book building is a valuation approach where the price of a stock or security is determined by investors who table the price they want to buy the asset for and the quantity they want to purchase. The sum of all the orders and the value is then used to determine the average price.
MTN Nigeria has a current valuation of $5.2 billion, going by its current over the counter price of $13. I am not one of those who lust after IPO’s but this one might be quite tempting. MTN Nigeria could just be worth more than the parent company in a couple of years.
8. African Export-Import Bank (Afrexim) revealed last week that it plans to sell shares in Nigeria and two other African countries to support lending and broaden its ownership base.
Afrexim revealed it was is in talks with Nigerian regulators to issue depositary receipts and raise equity worth $200m by the third quarter. Global depository receipts, give investors the ability to invest in a company, without having to bother with differences in tax and trading regulations.
The bank in November last year obtained a $200 million loan from a consortium of Japanese banks, followed. In 2016, shareholders of Afrexim Bank approved that they raise $1b in equity. This paved the way for the bank to add six new shareholders who were issued class B shares. They include Dangote Group, Seychelles Pension Fund, Econet Global Limited, Atlantic Financial Group.
ICYDK, Afrexim Bank loans are one of the most sought-after in Nigeria and indeed the continent. They are cheap, in dollars and have longer tenors. They are also very flexible with repayments. If you are looking for cheap debt funding and generate over N2b in revenues then Afrexim is probably a choice you should explore. BTW, their CEO DR Oramah is one of the most influential Nigerians in Financial Circles. He’s been at the top for over a decade now.
9. United Bank for Africa (UBA) and China Development Bank (CDB), the world’s largest development finance institution, last week announced the signing of a $100 million seven-year loan agreement to finance the development of small and medium enterprises (SMEs) in Africa.
The $100 million loan will enhance UBA’s capacity to provide access to finance to small and medium enterprises (SMEs) across the 19 African countries where UBA currently operates.
This is a big deal for UBA as they expand their lending capabilities to SMEs not just in Nigeria but in Africa. I have always believed UBA was yet to fully benefit from its status as one of Africa’s local banks, considering its widespread. UBA is in about 20 African countries. A drawdown rate of at least 50% of these funds will be immense for the bank.
For China, this is just one aspect of their African expansion strategy. They leverage on their financial muscle to give its industries access to the African market where they can sell their technology.
10. Best Food Farms announced during the week that it had taken delivery of 20 units of Dizengoff greenhouse technology units which it believes will help to boost its vegetable production.
We understand Dizengoff is one of the best Greenhouse Farms products in Nigeria with production capacity estimated at 30 metric tonnes per-season.
Dizengoff is of German origin and is based on Nigeria. They produce the Greenhouse kits for farms in Nigeria to help grow their vegetables and also sell other technological products that aid farming. Greenhouse kits can cost as much as £7k or N3.5 million. Reports suggest demand for vegetables is put at over 2.3 million metric tonnes per year, with Nigeria only able to produce just about 1.8 million metric tonnes. Huge opportunity.
Best Foods is owned an run by the Ijewere Family. Former President of ICAN Emmanuel Ijewere is the chairman of the company. From what we gather, Best Foods is a household name when it comes to the supply of vegetables and associated products in Nigeria.
11. Ashaka Cement announced last week that it has joined the bandwagon of large-scale factories that have abandoned the national grid for independent power generation.
The company reported during the week that it has commenced the construction of a 16-megawatt power plant that is expected to be completed by 2019.
Here is the Managing Director, AshakaCem, Mr. Rabiu Umar explaining why they are going off-grid. “Last year, we started our power plant, which is a N11bn project, and we hope to inaugurate the project soon. Currently, we rely on generators for our operations, which consume much fuel and whether you are using diesel or petrol, it has a strong correlation to foreign exchange. So, we are helping to remove ourselves from the demand for energy and providing our own solution, which means a minimum of 16 megawatts of electricity will now become available to the public grid for the people in the region to enjoy from. The power plant is our biggest plan aimed at reducing our costs.”
The last sentence caught my attention. They are spending N11b to reduce cost. From our research, Ashaka spent about N95 million on Electricity in 2015. Important to add that it incurs a shared cost of about N1.6b with its Parent company which might include power cost.
But can it be more than an extra N200m per annum? Why then tie down N11b in cash in capex? What do I know? At N11 billion the power plant cost around $2,777/kw, a price range that falls within the region of renewables. Ashaka did not mention if it’s a gas, biomass, hydro, thermal etc. power plant.
12. So, Dangote revealed last week that it was extending its sponsorship partnership of CNN’s Marketplace Africa.
Dangote sponsors Profit Point, a segment within the weekly show which asks business leaders how they achieved success and when their companies reached profitability.
It will also be launching a new brand campaign on CNN TV and Digital, and – in a media-first – integrating Dangote Industries. Dangote is apparently very big about their image, something local media companies should take note of.
13. Looks like the controversy trailing Visionscape’s operations in Nigeria is not about to end anytime soon.
Contrary to what most people understood, the Association of Waste Managers of Nigeria (AWAM) popularly known as PSP has denied having a partnership deal with Visionscape as regards waste disposal in Lagos.
The Chairman of the association, Oladipo Egbeyemi, said that “claims that Visionscape and the PSP operators have resolved to work as partners following a meeting on Thursday the 22nd February 2018. This is clearly misleading and untrue.”
According to him, while the Exco and Visionscape were in court negotiation terms of a new deal, some members of their association held a parallel meeting with Visionscape and the Ministry of Environment reached an agreement which they claim Visionscape took to the press as a confirmation of an agreement. We just hope these guys resolve their issues quickly by keeping our streets clean. These guys are throwing dirt at each other while the streets of Lagos stinks.
14. On a flipside, the Chief Executive Officer of VSS, Mr John Irvine says it will partner local truck dealers to facilitate waste management in Lagos State.
They also revealed they will be partnering with Silo Truck.
According to him, VSS has been having issues bringing in vehicles into the country. He claims they currently have started with 55 utility vehicles and has added 43 others. And that while getting the truck was one thing fitting it with the equipment that helps lift dirt was a different challenge. Apparently, this is fabricated differently and on order, which could take weeks to materialize.
15. There have been recent rumours that the Edo Fertilizer Plant and Chemical Company Limited located in Auchi had stopped producing.
Recall, the plant was commissioned in August last year by Vice President Yemi Osibanjo to much fanfare and expected to produce 60,000 metric tons of fertilizer for Edo and other neighbouring states.
Operators of the plant informed journalists on a fact-finding mission that this was untrue and that the reason why they had stopped producing was that their stores were filled with over 30,000 bags of fertilizers. Factory manager of the plant, Mr. Iyere Okhun, who informed journalist explained that “For the few days, we were able to produce more than 30,000 bags that is about 51 trucks of a 600 bags truck. As at yesterday, we have loaded out six trucks.”
The factors of production in Nigeria is something else and I bet some cannot be found in any syllabus. How can you have 30k bags of fertilizers lying in a warehouse with no reliable distribution mechanism??
16. Premium Steel Rolling Mill formerly called, Delta Steel, was commissioned last week by Delta State Governor by Governor Dr. Ifeanyin Okowa.
It’s incredible to recall that this same steel company was originally commissioned in 1982.
Just a bit of background, Delta Steel was originally sold Delta Steel in 2006 under controversial circumstances to Pramod Mittal, the younger brother of Lakshmi Mittal, an Indian multibillionaire and Chairman/CEO of ArcelorMittal, the world’s largest steel manufacturer.
However, Late President Umaru Musa Yar’Adua reversed the privatisation of Delta Steel when it was discovered that GSHL breached the terms of the sale by failing to inject equity into the company.
Rather, reports then suggest they borrowed money from Zenith Bank to acquire the asset, defaulted on the loan leaving Zenith Bank with no option but to sell it to AMCON. Premium Steel & Mines, a company owned by Mr. Sunil Vaswani then acquired it from AMCON. Nigeria may not be Wakanda for you but it sure is for a lot of people who come here to hammer.
17. International Microphone Shure Incorporated has announced last week that it was going into partnership with Showgear Limited, a retail player in audio-visual products in Nigeria.
This deal allows Showgear to provide sales and after-sales services of the microphones.
Did you know a Shure ULXS24/BETA58 HANDHELD WIRELESS SYSTEM cost as much as N270k ( I actually never knew this). From what I gather, Global Microphone market is said to be worth about $3.5b by 2015. What do you know about Showgear? Care to share
18. Oando reported last week that it will experience delays in releasing its 2017 Audited accounts as it was under review by the Financial Reporting Council of Nigeria.
Oando claims the FRC took interest in its financials following the investigations being conducted by the FRC.
Don’t be surprised if these investigations amount to nothing, after all its Nigeria. On a brighter note, Seplat released ‘blistering results’ in 2017 as revenues rose 18% YoY to N53 billion while, Profit Before Tax was 93% up at N25.9 b. However, Profit after tax was N82.7 billion (that’s not an error). Go figure…
19. Fastfood Giant Nestle also released its 2017 FY results reporting a 34% rise in revenues to N244 billion.
Profit after tax was N33.7 billion about 400% higher than the year before. That was a monster of a result.
Business
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.
READ MORE: Seplat denies swindling FG of N600 billion despite co-conspirator’s guilty plea
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.
READ ALSO: Seplat’s Austin Avuru no longer has direct shares in company
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.
READ: Okomu Oil Palm ‘s profit declines by 43.22% as at Q3 2019
Backstory
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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Business
Buhari orders payment of stranded NDDC scholarship students, commission gives reason for delay
The delay, it was revealed, was caused by the sudden death of the then EDFA of the commission.
President Muhammadu Buhari has ordered the Niger Delta Development Commission (NDDC) to immediately pay the fees and stipends of the stranded Nigerian scholars who have been facing hardships abroad.
This was disclosed in a press statement by the NDDC and signed by the commission’s Director for Corporate Affairs, Charles Obi Odili, on Tuesday, August 4, 2020.
Odili revealed that the delay in the remittance of the fees for these scholars was caused by the sudden death of the then Acting Executive Director for Finance and Administration, EDFA, of the commission, Chief Ibanga Etang.
READ MORE: Corruption probe: NDDC claims to have spent N81.5 billion in 7 months
Odili stated, “Under the Commission’s finance protocol, only the Executive Director (Finance) and the Executive Director (Projects) can sign for the release of funds from the Commission’s domiciliary accounts with the Central Bank of Nigeria, CBN. With the death of Chief Etang, the remittance has to await the appointment of a new EDFA’‘
Odili stated further that, “Senator Akpabio, the Honourable Minister, said President Buhari who has been briefed on the protest by students at the Nigerian High Commission in London, has ordered that all stops be pulled to pay the students by the end of this week. We expect a new EDFA to be appointed this week. As soon as that is done, they would all be paid.”
It would be recalled that the plight of the Nigerian scholars came to the fore after it was revealed, the terrible conditions they were going through in foreign countries since not being able to pay their tuition fees. These revelations caused outrage on social media with many blaming the government for not caring enough for its people.
READ ALSO: Akpabio denies accusing Reps of receiving 60% of NDDC contracts
The non-payment of the allowances and tuition fees of the students by NDDC is coming amid the corruption and financial mismanagement allegations that have been rocking the commission for some months now.
The students said they are going through a lot of hardship due to lack of funds from the NDDC and are unable to engage in menial jobs to survive because of the impact of the coronavirus pandemic.
Following up with its own intervention, the Chairman of Nigerians in Diaspora Commission (NIDCOM), Abike Dabiri-Erewa, asked the NDDC as a matter of urgency to pay the allowances, tuition fees and other incentives of students under their scholarship scheme.
READ ALSO: Earning BTCs without Having To Pay Money
She said that last month, she wrote a letter to the Minister for Niger Delta Affairs, Godswill Akpabio, drawing his attention to the plight of the Nigerian students under the NDDC scholarship scheme in Europe.
Business
NIPOST’s new charges could have ruined the e-commerce/logistics industry
The backlash NIPOST got from SME proved enough to get the attention of the FG.
The Nigerian Postal Service (NIPOST) introduced new charges that would cause an increase in the costs of licensing for logistics and courier service providers which resulted in major outrage all over the internet and rightly so.
According to the Vanguard, International courier services like DHL and UPS were expected to pay N20M for a new license and N8M annually while national service providers were to pay N10M for the license to operate and N4M for annual renewal. As for the logistics companies operating within regions, they were to pay N5M for license and N2M annually while firms operating within states got N2M for licence and N800,000 for renewal. Courier firms within municipalities were to pay N1M license fee and N400,000 annually and for SMEs, the license was set at N250,000 while the annual renewal is N100,000.
READ MORE: CBN holds N43 billion stamp duty charges from banks – FG
Reportedly, the General Manager, Corporate Communications, Franklin Alao, said in a statement that the new regulations were not planned to frustrate ease of doing business rather they aimed to promote growth of MSMEs. He said, “It is part of the strategies to ensure effective service delivery as consumers would know the capacities of the operators they are dealing with… Kindly note that consumers of the courier service would be better off as this will drive charlatans out of the industry. Genuine and serious operators would come back to celebrate this move.”
Fortunately, all through last week, the backlash NIPOST got especially online from SME proved enough to get the attention of the Federal Government because as the Premium Times reported, on Saturday, Isa Pantami, the minister of communication and digital economy rejected the proposed increment on the fees for courier services companies by the Nigerian Postal Services (NIPOST).
READ ALSO: Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020
Pantami said in a tweet, “Our attention has been drawn to an increase of license fee, which was not part of the regulation I earlier approved for you… Your Chair and PMG were yesterday contacted to put the implementation on hold and send a report to our ministry by Monday. Best Wishes”. Pantami also said “I know the economic challenges of NIPOST. However, looking at the economic hardships of our citizens, we need to suspend any move.”
This could have been really bad
The increase in charges would affect three main industries in the economy: e-Commerce, SMEs and ride-hailing.
- On Tech Round Up, we discuss time and again how the e-Commerce growth in Nigeria is directly propositional to logistics. As a statement of fact, an e-commerce firm’s level of functionality is heavily based on the strength of their logistics abilities. In essence, e-commerce will not work without the backing of an effective logistics structure.
With Covid-19 came a boom in the Nigerian e-commerce space. Last week, we discussed the increasing interests in M&A deals as MumsVillage and Baby Bliss merged to form the Bliss Group. Also, many consumers had since the lockdown, become dependent on online shopping- this without a doubt will affect these groups of individuals if the government should let this charge increase happen. It will without a doubt increase the prices of goods online and eventually, the boom in online shopping culture may drop drastically.
READ MORE: Gokada pivots into food delivery service
- Small businesses are the backbone of our nation and the same can be said for most economies around the globe, this kind of outrageous increase on charges will only further discourage these already struggling businesses from operating. This increase in fees, if the minister had not interfered would have only made the entire situation of our economy worse. Allegedly, NIPOST had already started seizing delivery motorcycles and demanding fees up to N250,000 from some businesses. This is a lot of money right now especially with most of these small businesses and companies moving their operations online and using logistics to delve into untapped audiences.
- The Ride-Hailing Businesses too since the beginning of 2020 has had to readjust, restructure and reevaluate a lot of their offerings. For those firms who have delved into the logistics space full time, these charges may have completely ruined their already slim chance of surviving.
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It is a struggle out in these streets. Nigerians and the Nigerian economy has suffered severely in these last few months due to the pandemic- businesses, companies, industries and individuals have been left to bear some great losses and it seems the not so great news keeps on coming.
Another reason why this agenda to increase fees appeared fishy was because they seemingly announced this right after the NIPOST had purchased a fleet of delivery motorcycle- so was it their intent to intimidate or maybe strong-arm the competition and monopolize the sector? Maybe we will never know but it definitely did not sit well with many Nigerians, hence the outrage on the internet.
READ MORE: NIPOST ignores Minister’s e-payment order, collects cash on stamps, other services
Even if these charges do get implemented, the NIPOST needs to allow enough time for the economy to stabilize rather than implementing an outright increase that could result in the shutdown of operations of those involved in logistics. There are smarter more mutually productive ways to coexist. These governmental bodies need to figure these out and implement them, it is important for governments and industries to work together to manage the changes that will improve our economy.
United Bank for Africa provides $200 million for Nigeria’s Petroleum Industry – Timely financing for Post COVID economic growth
Activity level rebound in June as locals sustain dominance
Austin Avuru retires as CEO of Seplat petroleum, to receive huge benefits
Buhari orders payment of stranded NDDC scholarship students, commission gives reason for delay
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