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Dangote and Peugeot to start assembling cars by Q1 2019

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Aliko Dangote, billionaires

Come early next year, PSA Peugeot Citroen will commence the assembling of cars in Nigeria alongside its local partner, Dangote Group.

Dangote-Peugeot Automobile Nigeria Limited (DPAN), a joint venture of PSA Peugeot Citroen, Dangote Group and five state governments in Nigeria (including the Kaduna State Government) will see about 3,500 cars assembled in 2019.

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Jimi Lawal, an advisor to the Kaduna State Governor confirmed to Reuters yesterday that the assembly plant will indeed commence operation between January and March 2019.

“The first vehicle should come out by the first quarter of next year. We are hoping that the factory will be completed by December. The land has been identified … we have advertised for a contractor that will build the factory.” – Lawal

The assembling plant will be located in Kaduna, Northwestern Nigeria.

Nigeria has a huge auto market with its nearly 200 million population. Unfortunately, “limited bank financing and the absence of an industrial policy has stunted growth”, Reuters reports. Only a few new cars are sold, even as reliance is mainly on the importation of second-hand cars from Europe and the Americas.

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Thanks to this partnership, Peugeot will locally assemble its trademark 301 Sedan in small volumes at the plant operated by DPAN. The company said the cars “will be produced from semi-assembled kits of parts shipped from Peugeot’s plant in Spain.”

There are also plans to begin the production of additional models such as 508 and 308 Compact, just as Peugeot hopes to increase production volumes to as much as 10,000 in coming years.

DPAN will commence operations with ₦3.5 billion equity and about $5 million-worth of working capital. There are plans to raise additional capital.

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In the meantime, Dangote will own a majority stake in DPAN while Peugeot Citroen will own 10%. Peugeot will also operate the plant.

Recall that Dangote had in recent times, pledged ₦11 billion in a bid to acquire a majority stake in Peugeot Automobile Nigeria (PAN) from the Asset Management Company of Nigeria (AMCON), an exercise that remains unresolved till date. AMCON acquired a majority stake in PAN in 2012 after taking over the company’s debts worth about ₦30 billion owed to some Nigerian banks.

PAN was incorporated on December 15, 1972, as a limited liability company with an authorized share capital of N3 million. It commenced full operations on March 2, 1975. The company, however, ran into trouble barely two decades after commencing operations.

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Patricia

Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

2 Comments

2 Comments

  1. akinmail

    June 6, 2018 at 10:11 am

    #5 million working capital?

    • Kenneth Glendinning

      June 23, 2018 at 11:51 pm

      5,000,000 United States Dollars
      USD $5m (Five Million)

      equates to

      1,799,000,000 Nigerian Naira
      NGN 1.8B (1.8 Billion)

      No be small money-oh.

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Tech News

3 startups to get N3 million grant each in the COVID-19 virtual hackathon 

The hackathon hopes to identify accessible and cost-effective E-Learning solutions for public schools.

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The Nigerian Communications Commission has announced that 3 finalist startups will get a grant of N3 million each at the end of the COVID-19 virtual hackathon 

These three startups will be selected from submitted entries that meet all the criteria and provide adaptable digital solutions for addressing the present and future impacts of pandemic and epidemic diseases 

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The solutions must be novel, clearly explained, with proof of concept  

NCC announced this through a statement published on its Twitter handle.  

The grant, it said, will enable the three startups with the most promising digital solutions to produce a prototype within 2 months of receipt.  

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According to the statement, submitted entries are expected to provide solutions in sectors such as health, digital communications, education, transportation.  

For those in health, the solutions should find a way to empower frontline healthcare workers or prevent, trace, and contain the spread in Nigeria.  

Solutions in digital communications are expected to aid the sustenance of economic activities and people-to-people communication while encouraging social distancing without compromising productivity. 

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The hackathon also hopes to identify accessible and cost-effective E-Learning solutions for public schools, as well as improved safety measures in public transportation in Nigeria.  

Interested tech hubs, startups and innovative digital SMEs can still submit entries on or before July 17, 2020.  

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Financial Services

CBN expands scope of regional banks in Nigeria, gives compliance timeframe

The aim of this directive is to expand the reach of the regional banks across the country, the CBN said.

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Regional Banks

The Central Bank of Nigeria (CBN) has expanded the scope of regional banks in the country, by requiring them to open branches in at least one additional geopolitical zone outside of the existing geopolitical zones where their operating licenses cover.

A circular that was issued earlier this week by the apex bank said this new directive is in accordance with “section 8 (g) of the CBN Scope, Conditions & Minimum Standards for Commercial Banks Regulations no [1] 2010 as revised on September 4, 2019.” 

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The new directive took effect on Friday, June 26, 2020. In other words, all the regional banks are expected to have become aware of this development since then. They now have a timeframe of six months to establish their presence in the geopolitical zones outside of where they currently operate.

It should be noted that prior to this time, regional banks in the country typically operated in at least two geopolitical zones of the federation. However, in line with the new expansion, the CBN shall now prescribe an additional geopolitical zone for each of these regional banks, thereby making the coverage area three geopolitical zones per regional bank.

Meanwhile, the CBN said the aim of this directive is to expand the reach of the regional banks across the country, whilst ultimately promoting financial inclusion. Note also that the new directive affects all regional banks, both the ones engaged in commercial banking and non-interest banking. Some part of the circular said:

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“Effective the date of this circular, all banks with regional authorisation shall be required to operate from one additional geopolitical zone as may be prescribed for each institution by the CBN, without prejudice to the existing requirement of the minimum of two (2) geopolitical zones of the federation. The essence is to promote spread and balance of the regional banks across the country.

“The compliance timeline to establish operational footprint at the advised zone shall not exceed six (6) months from the issuance of the regulatory advice to each regional bank by the CBN.”

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Economy & Politics

Nigerian and US Authorities battle former Enron Nigerian Subsidiary over $80 million Yacht

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

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19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history, a former subsidiary of the company is battling Nigerian and American Authorities over the sale of a yacht valued at over $80 million acquired by Nigerian businessman Kolawole Aluko. 

The yacht was seized by the US Government in 2018 after prosecutors say it was bought with the proceeds of bribes paid to Nigeria’s former Minister of Petroleum, Diezani AlisonMadueke. 

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The yacht was later auctioned for $37 million in 2019. The Nigerian government also dropped claims to the proceeds of the sale recently and a Texas Court ordered all proceeds should be retained by the US Government. 

However, a former unit of the Bankrupt Enron, Enron Nigeria Power Holdings claims its entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a Power plant. 

(READ MORE: Nigeria leads Africa combined in Q2 2020 on BTC P2P)

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Enron Nigeria claims the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them. Saying Nigeria dropping its claims was a recognition of the factual and legal basis” in a DOJ court filing. 

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

Enron Nigeria Power Holdings Ltd is owned by ex-Enron staff involved in the negotiations for the Power Plant contract in Nigeria and was bought out of bankruptcy for $750,000 in 2004 by a Cayman Islands registered company. 

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An arbitration ruling in 2012 awarded Enron Nigeria Power Holdings $11.2 million including interest in damages against the Nigerian government. 

The DOJ says Mr. Aluko bought the yacht for $82 million in 2013 and funded a lavish lifestyle for Alison Madueke in exchange for NNPC contracts valued at over $1.5 billion. 

Aluko and his business partner, Olajide Omokore are also accused of laundering illicit revenues into and through the United States

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