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.
CAC sets 3-hour time line for company registration in 2021
The CAC is prioritising the reduction of the registration circle for new companies to just 3 hours before the end of the year 2021.
The Corporate Affairs Commission (CAC) has said that following the successful deployment of an end-to-end registration module, it was now prioritising the reduction of the registration circle for new companies to just 3 hours before the end of the year 2021.
This is coming after CAC had in November 2020, announced the implementation of new technology that will change the face of business registration including allowing customers to print their certificates with verifiable QR code from anywhere in the world.
This disclosure was made by the Registrar-General of the commission, Garba Abubakar, at a dinner in honour of the Chairman, Governing Board, CAC and Nigerian Ambassador-Designate to the Kingdom of Spain, Ademola Seriki.
In order to achieve this target, the Registrar-General said the commission was making arrangements to empower over 400 approving officers with working tools to process and approve registration applications either from home or anywhere necessary,” the agency stated.
Abubakar noted that the challenges of the Covid-19 pandemic had adversely hampered CAC’s delivery timeline.
He, however, pointed out that CAC was resolutely committed to serving its customers despite being forced to operate with less than 50% of its workforce.
While bidding farewell to Seriki, the Registrar-General said he received the news of his appointment with mixed feelings as CAC was going to miss his tremendous support and guidance.
Also speaking at the event, the Minister of Industry, Trade and Investment, Niyi Adebayo, described the outgoing CAC Chairman as a man of immense pedigree and endowed with enormous potential to justify the confidence reposed in him by the president.
In case you missed it
- The CAC recently announced the upgrade of its website and online registration portal to include features, which allow for the automation of some selected services and processes, in line with the Federal Government’s mandate of improving the ease of doing business in Nigeria.
- The selected services and processes include Electronic search of company records, Upgraded Companies Registration Portal for Pre-incorporation filings and Post incorporation filings.
The Corporate Affairs Commission (CAC) says following the successful deployment of an end-to-end registration module, it is now prioritizing the reduction of the registration circle for new companies to just 3 hours before the end of year 2021. pic.twitter.com/mMGjLN1JeS
— Corporate Affairs Commission (@cacnigeria1) April 11, 2021
DEAL: Nigerian fintech software provider, Appzone raises $10m to scale its products and services
Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa.
Appzone a fintech software provider that builds proprietary solutions for financial institutions and their banking and payments services announced that it has closed $10 million in Series A investment.
The Series A round was led by CardinalStone Capital Advisers, a Lagos-based investment firm. Other investors include V8 Capital, Constant Capital, and Itanna Capital Ventures. New York-based but Africa-focused firm Lateral Investment Partners also participated.
Founded in 2008 by Emeka Emetarom, Obi Emetarom, and Wale Onawunmi, Appzone functions as an enabler (at payment rails and the core infrastructure) within banking and payments.
Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa. Together, they amass a yearly transaction value and yearly loan disbursement of $2 billion and $300million.
Before now, Appzone closed a $2 million deal from South African Business Connexion (BCX) in 2014. Four years later, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. But overall, the company says it has raised $15 million in equity funding.
This new funding will be used to scale its products and services and expand across more African countries. The startup also plans to achieve scale by growing its engineering team.
What they are saying
Yomi Jemibewon, the Co-Founder and Managing Director of Cardinal Stone Capital Advisers, said the firm’s investment in Appzone is further proof of Africa’s potential as the future hub of world-class technology.
“Appzone is building a disruptive fintech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure, and software as a service. The impact of Appzone’s work is multifold — the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best-in-class employment opportunities.”
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