Japaul oil and gas have announced it will pull out of the equity financing facility $350 million with Milost Global Inc.
In a statement signed by the company’s Acting Managing Director, Akin Oladapo, it noted that in view of the several red flags associated with the planned equity injection, the company has decided to pull out of the deal.
The journey so far
- Recall that Japaul entered into an agreement with Milost Global Inc for a financing facility of $350 million under the Mesa Fund 1, a global opportunity fund that is managed by Milost Global Inc.
- The financing agreement was arranged and negotiated by Palewater Advisory Group Inc in New York and Banklink Africa Limited in Nigeria.
- During the signing of the agreement, Paul Jegede, CEO, Japaul Oil & Maritime Services Limited, noted that the new financing is an opportunity for the company to optimize the potentialities in all areas of its businesses especially in areas of mining which the Japaul Group has diversified into.
- However, revelations by Businessday and other media outlets regarding the integrity of the deal has now resulted in a rethink by the company.
- Ironically, the CEO of the Japaul had admonished Businessday for criticizing the deal calling them out for “purports lies”.
- The hammer for Japaul must have come from SEC who may have waded in after the controversy surrounding the deal appeared to be getting out of hand.
- Unity Bank and Aso Savings had also backed off on the deal.
Poor results continue
Troubled Japaul Oil & Gas in its recently released full-year 2017 Audited accounts reported a loss after tax of ₦13.2 billion (2016 FY: ₦22 billion).
Its Q1 2018 results also show a massive plunge in its turnover from ₦221 million in Q1 2017 to ₦108.76 million in Q1 2018, this represents a massive 50% drop in revenue. Also, its loss before tax also grew from ₦519.7 million in Q1 2017 to an astronomical ₦3.2 billion in Q1 2018.
Japaul has been technically insolvent since 2016 with reported losses every year since 2014, surviving only on bank borrowings and at the mercy of International Oil Companies IOCs which it has contracts with.
Meanwhile, the company acquired an additional loan facility of $9,000,000 from Diamond Bank after an initial $70,000,000 in 2013. It also acquired a loan facility of $20,000,000 from Access Bank in 2014.
The possibility of these banks recovering these loans is unlikely perhaps indicative that the banks may have taken full provisions of the loans.
In its 2017 full year report, the auditors of the company questioned the going concern status of Japaul reporting that “a matter of uncertainty exist which may cast significant doubt on the Group’s ability to continue as a going concern.”
Japaul Oil & Maritime Services Plc was first incorporated in 1994 as a private limited liability company with an authorized and paid up Share Capital of ₦1,000,000 divided into 1,000,000 Ordinary Shares of ₦1 each. The company commenced active business operations in 1997 and is listed on the Nigerian Stock Exchange (NSE).
Japaul Oil shares price is currently traded ₦0.44 as at today on the floor of the stock exchange and its 1-year return is down by 12%.
Milost Global, founded by Mandla J Gwandiso in 2015 is an American Private Equity firm that is headquartered in New York City, with more than $25 billion in committed capital.
Milost is also a provider of alternative capital, mezzanine finance and alternative lending to a broad range of industries across the globe including Technology, Transport, Cannabis, Education, Distribution, Mining, Oil & Gas, Financial Services, Healthcare, Pharmaceuticals, Real Estate, Alternative Energy and Infrastructure Development
Palewater Advisory Group is a multinational corporate and public affairs advisory firm with headquarters in New York. The company specializes in cross-border and Mergers and Acquisitions transactions, financing, public affairs, political campaign capital raising, and strategy.
COVID-19 Update in Nigeria
On the 19th of October 2020, 118 new confirmed cases were recorded in Nigeria
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 61,558 confirmed cases.
On the 19th of October 2020, 118 new confirmed cases were recorded in Nigeria, having carried out a total daily test of 11,794 samples across the country.
To date, 61,558 cases have been confirmed, 56,697 cases have been discharged and 1125 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 590,635 tests have been carried out as of October 19th, 2020 compared to 578,841 tests a day earlier.
COVID-19 Case Updates- 19th October 2020,
- Total Number of Cases – 61,558
- Total Number Discharged – 56,697
- Total Deaths – 1,1125
- Total Tests Carried out – 590,635
According to the NCDC, The 118 new cases are reported from 10 states – Lagos (51), Rivers (26), Imo (12), Osun (8), Plateau (6), FCT (5), Kaduna (4), Ogun (3), Edo (2), Niger (1)
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 20,696, followed by Abuja (5,923), Plateau (3,587), Oyo (3,415), Rivers (2,735), Edo (2,645), Kaduna (2,532), Ogun (1,983), Delta (1,812), Kano (1,741), Ondo (1,657), Enugu (1,313), Kwara (1,050), Ebonyi (1,049), Osun (916), Katsina (904), Abia (898), Gombe (883). Borno (745), and Bauchi (710).
Imo State has recorded 610 cases, Benue (484), Nasarawa (478), Bayelsa (403), Ekiti (329), Jigawa (325), Akwa Ibom (295), Anambra (275), Niger (274), Adamawa (248), Sokoto (162), Taraba (117), Kebbi (93), Cross River (87), Zamfara and Yobe (79), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
Nigerian firm set to raise $1.2 billion to purchase electricity meters
MAPCo plans to raise N480 billion to purchase electricity meters and to help the DISCOs plug revenue gaps in their operations.
A Nigerian firm, Meter Assets Finance and Management Company (MAPCo), has concluded plans to raise N480 billion ($1.2 billion) over the next 3 years, to purchase electricity meters and help the electricity distribution companies (DISCOs) plug revenue gaps in their operations.
This is also in line with the Federal Government’s initiative to ensure that all electricity consumers are metered, which will put an end to estimated billing by the DISCOs.
According to a report from PricewaterhouseCoopers, less than one-tenth of Nigeria’s 41 million households have their electricity consumption metered, and half of those are faulty. As a result, distribution companies have to estimate bills, resulting in constant conflict with the consumers that delay payments.
The Chief Executive Officer of New Hampshire Capital, Onion Omonforma, said the Meter Assets Finance and Management Co. hopes to end the practice of estimated billings by raising funds to purchase and supply meters to consumers.
New Hampshire Capital, FBNQuest and Kairos Investments Africa are helping to package and structure the venture, known as MAPCo, for investors to either buy equity or inject debt into the company.
What they are saying
Omonformaa said, “The electricity distribution firms will then have the money to go back and buy more meters and the cycle continues, paving the way to close the metering gap. MAPCo will collect the cost of the meters from consumers at a premium over the next 10 years. The meters will be handed over to the power-distribution companies once paid off.’’
While disclosing that MAPCo plans to issue a N100 billion bond in the next year, Omonforma also pointed out that roadshows have been planned for the U.S. and Europe, and will include local institutional investors.
He said, “We envisage that a lot of people who are looking for a long-term instrument will key into it,”
It can be recalled that apart from repealing the estimated billing methodology in determining tariffs for electricity consumers; the Federal Government had insisted that all consumers must be metered, as part of the condition for a tariff increase.
Also, as part of the agreement reached with the organized labor in respect of the tariff increase; the Federal Government disclosed that the National Mass Metering Programme will be accelerated, with the distribution of 6 million meters to Nigerians for free.
What this means
A huge number of electricity consumers across the 36 states and the FCT are still unmetered by their respective DISCOs. This initiative by MAPCo will help bridge the existing gap, with more electricity consumers acquiring a prepaid meter and doing away with the controversial estimated billing.
Furera Jumare resigns from Union Bank Board following appointment by Jigawa State
Mrs. Furera Isma Jumare has resigned her role on the Board of Union Bank of Nigeria Plc.
Following her appointment as Director-General of the Jigawa State Investment Promotion Agency, Mrs. Furera Isma Jumare has resigned her role as Independent Non-Executive Director on the Board of Union Bank of Nigeria Plc. This in line with regulatory guidelines precluding certain categories of public servants from serving on boards of banks and other financial institutions.
Commenting on the Mrs. Jumare’s resignation, Board Chair, Mrs. Beatrice Hamza-Bassey, said:
“Since joining the Board in May 2017, Furera has been an invaluable voice in the Boardroom. Her experience and professional counsel directly contributed to our wins in recent years and in helping us navigate challenging times. She also served studiously as the Chair of the Board Governance Committee and Member of the Board Audit and Risk Management Committees. On behalf of the Board, I thank her for her diligent service and wish her much success as she answers the call of service to her State.”
Chief Executive Officer, Mr. Emeka Emuwa, said:
“Furera’s appointment is a clear acknowledgement of her experience and accomplishments in her long career including in her role as Director with Union Bank. The Board and Management are grateful for her service and wish her the best in her new role.”
Mrs. Jumare’s resignation is effective immediately.