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Companies

C&I Leasing Plc and its steady quest for financial redemption

C&I Leasing Plc announced that it had finalised the complete acquisition of stakes in C&I Petrotech Marine Limited.

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C&I Leasing Plc, Nigerian Stock Exchange, NSE, Suspension

Two weeks ago, the management of C&I Leasing Plc announced that it had finalised the complete acquisition of stakes in C&I Petrotech Marine Limited, thereby making the company its wholly-owned subsidiary.

Prior to the 27.5% minority stake buyout, C&I Petrotech Marine Limited was a joint venture partnership.

The complete acquisition of C&I Petrotech Marine Limited is just one out of the two major steps that C&I Leasing Plc has taken in recent times towards the restructuring and repositioning of its operations for enhanced profitability. More about this will be discussed shortly.

In the meantime, note that C&I Leasing Plc is one of those little-known companies which Nairametrics has been profiling once every week. Get to know more about it – its year of incorporation, services, financial performance, and debt crisis.

Corporate information about C&I Leasing Plc

Incorporated in 1990, C&I Leasing Plc is a Nigerian company which, through its subsidiaries, specialises in the provision of services such as fleet management, automobile distribution, marine vessel rental, equipment leasing, security and escort services, and fire-fighting services.

The company also offers pollution control services, mooring support, and recruitment/HR consultancy services, to mention a few. It is headquartered in Lagos Nigeria, but has operations in Ghana (Leasafric) and the United Arab Emirates (EPIC International FZE).

Like most companies, C&I Leasing Plc initially started out as a limited liability company, with a license from the Central Bank of Nigeria to offer finance leases and operating leases.

By 1997, the company restructured and diversified its operations, while also converting from a limited liability company to a public company. That same year, it had its stocks listed on the Nigerian Stock Exchange, thereby becoming the first leasing, logistics and rental company to do so in Nigeria.

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Some of the company’s main services are:

  • C&I Marine
  • Fleet Management Solutions
  • Hertz Rent-A-Car
  • C&I Outsourcing
  • CITRANS Telematics Solutions

A look at the target markets for C&I Leasing Plc

As one of the leading logistics, leasing and support services firms in Nigeria, C&I Leasing Plc has target markets in the maritime, oil and gas, transportation, manpower outsourcing, telecommunications and equipment rental sectors. One of its biggest customers is probably Shell Petroleum Development Corporation (SPDC).

C&I is currently engaged in a long-term contract with the international oil company, which has seen six of C&I’s vessels deployed to the deep sea for oil exploration activities.

Meanwhile, as part of its outsourcing support services, C&I Leasing offers human resources and recruitment services to different companies. The company also manages fleets and rents vehicles — all services that are needed by companies in different sectors of the economy.

From the foregoing, it is obvious that it has a wide target market but how well has it leveraged this opportunity towards ensuring success?

The company’s board of directors

Mr Andrew Otike Odibi: He is the company’s Managing Director and Chief Executive.  He has a Bachelor’s of Science degree in Accounting from the University of Benin, as well as a Masters’ in Business Administration.

He is also a Chartered Accountant. Prior to joining C&I Leasing in 1998 as a Senior Manager, Odibi served a Branch Manager for Diamond Bank Plc. He was appointed to C&I’s board of directors in 2007, 9 years after joining the company. He has since remained with the company, becoming its MD/CEO in 2016.

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Chief Henry Okolo: Okolo currently serves as the company’s Chairman. A graduate of the University of Nigeria, Nsukka with a degree in Accounting, he is also the Chief Executive Officer of Dorman Long Engineering Limited.

He is also the Vice Chairman of the Nigerian Economic Summit Group, as well as a former Coordinator of the West African Enterprise Network (Nigerian Chapter) from 1995–1997.

Other notable members of the company’s board are:

  •         Mr Emeka Ndu: Vice Chairman and Founder
  •         Mr Alex Mbakogu: Executive Director
  •         Mr Omotunde Alao-Olaifa: Non-Executive Director
  •         Mr Sule Ogbomo: Non-Executive Director
  •         Jacob Kholi: Non-Executive Director
  •         Ikechukwu Duru: Independent Non-Executive Director
  •         Larry Ademeso: Non-Executive Director

CnI Directors’ shareholding according to the company’s 2017 FY report.

The company’s substantial shareholding structure

C&I Leasing Plc’s shares are substantially held by Leadway Assurance Co Ltd, CIL Acquico Ltd, and Petra Properties Ltd. These are all companies that are affiliated with some of the company’s directors.

The number of units and the percentages held by each of the above can be seen below: 

  • Leadway Assurance Co Ltd: 140,000,353 units; 8.66%
  • CIL Acquico Ltd: 130, 789, 499 units; 8.099%
  • Petra Properties Ltd: 87, 685, 985 units; 5.42%

Who are the company’s competitors?

C&I Leasing Plc faces competition mainly from other maritime support services providers such as Shelf Drilling and Borr Drilling, OES Energy Services Limited, Fenog Offshore Vessels, Zircon Marine, Blue Seas Maritime Services Limited, Japaul Plc, etc.

The company faces competition in the human resources/outsourcing sector, with the likes of Jobberman and other newer entrants dominating the sector.

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It is also important to note that the company is not having it easy in the car renting space, seeing as platforms such as Uber and Taxify are having a field day.

The company’s financial performance over the years

C&I Leasing Plc has managed to keep its revenue on the rise in the past five years. In the same vein, it has remained relatively profitable over the same period under review, between 2013 and 2017.

For instance, the company’s revenue rose from ₦12.2 billion in 2013 to ₦21.3 billion in 2017. Similarly, it remained profitable over the same period, with profit after tax (PAT) increasing from ₦161 million in 2013 to ₦1.1 billion in 2017. Margin as you can see has remained low.

But this performance notwithstanding, C&I Leasing has remained in bed with debt over the years.

More on the company’s financial woes

The company has a balance sheet size of N45 billion, out of which N35 billion is made up of all kinds of debt.

The interesting thing about its debt profile is not just that it is 3.5x its equity, it is the number of people that the company is owing. C&I owes just about every category of debtors – from banks, bondholders, tax authorities, to suppliers and even retirees. It’s a long list that can make any perennial borrower proud.

Some of its major debtors are banks like Access Bank, Diamond Bank, Citi Bank, FCMB, GTBank, Fidelity Bank, First Bank, UBA, Zenith Bank, Standard Chartered Bank, FSDH Merchant Bank, Absa Bank, Lotus Capital, Stanbic IBTC and Intercontinental Bank – Cedi.

That is about 15 banks by our count. It also owes about ₦9.6 billion to some “Individual Clients” and “Institutional Clients” as at 2017.

With all these in perspective, it becomes intriguing to know what exactly the company has been doing to offset its debts.

On its struggles to overcome its financial difficulties

Earlier this year, C&I Leasing Plc issued a ₦7 billion bond, the first in a series of ₦20 billion debt issuance programme.

Interestingly, the issue was oversubscribed by 33%, thereby indicating, if nothing else, that the investing community still has faith in the company.

Proceeds from the capital issue was reportedly meant for the refinancing of maturing bank loans, while some parts of it would also be used to scale the company’s operations.

Meanwhile, as we noted earlier, the company also recently completed the buyout of 27.5% minority stake in Petrotech Marine Ltd ostensibly taking charge of the company, which is by the way one of its biggest revenue generators.

In closing, there is light in the tunnel for this company, despite its financial challenges. Margins are still relatively low and returns on equity remain in the single digits.

It recently released its Q1 2018 financial statement, reporting gross earning to the tune of ₦6.47 billion; up from ₦6.097 billion in Q1 2017. Profit after tax also grew from ₦305 million in Q1 2017 to ₦405 million in Q1 2018.

The stock has returned 300% in the last one year and has been one of the better performers this years. At N2.44 per share (as at Friday) it is still trading at 3x its earnings.

Perhaps not a stock we could consider a buy but one surely to watch.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- emmanuel.ab[email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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    Appointments

    Airtel Nigeria announces appointment of Surendran as new Chief Executive Officer

    Airtel Nigeria, has announced the appointment of Mr C. Surendran as the new MD/CEO with effect from August 1, 2021.

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    Like MTN, is Airtel Nigeria considering listing?

    Telecommunications giant, Airtel Nigeria, has announced the appointment of Mr C. Surendran as the new Managing Director and Chief Executive Officer with effect from August 1, 2021.

    Surendran would be replacing the outgoing Managing Director and Chief Executive of Airtel Nigeria, Olusegun Ogunsanya, who has been elevated to the position of Chief Executive Officer of Airtel Africa Plc with effect from October 1, 2021.

    According to a report from the News Agency of Nigeria, this disclosure is contained in a statement issued by Airtel on Wednesday, May 5, 2021, in Lagos.

    READ: Airtel Africa signs new $500 million loan with Bank of America, HSBC, others

    The statement says that Surendran would also be appointed to the Executive Committee (ExCo) as Regional Operating Director, reporting to the CEO of Airtel Africa plc, and onto the Board of Airtel Networks (Nigeria) Limited.

    Airtel in its statement said, “Surendran has been with Bharti Airtel since 2003 and has contributed immensely in various roles across customer experience, sales and business operations.

    He was the Chief Executive Officer of Karnataka, which is the largest circle in Airtel India, with over one billion dollars in revenue.

    Surendran delivered an exceptional performance with significant movement in Revenue Market Share (RMS) over the last few years, currently at 54 percent. He has over 30 years of business experience, including 15 years at Xerox.’’

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    Airtel said that Surendran would transition into his new role from June 1, 2021, and spend the time onboarding into the business until July 31, 2021.

    READ: Meet the latest billionaires on the Nigerian Stock Exchange

    In case you missed it

    It can be recalled that a few days ago, Airtel Africa Plc, a leading provider of telecommunications and mobile money services in Nigeria and 13 other countries, announced the appointment of Mr Olusegun Ogunsanya as the new Chief Executive Officer, following the notice of retirement given by the current Managing Director/Chief Executive Officer, Raghunath Mandava, to the Board.

    In the notification sent by Airtel Africa to the Nigerian Exchange, Ogunsanya is expected to join the board of Airtel Africa with effect from October 1, 2021.

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    Companies

    Our First Bank loan is being serviced, reduced by 30% in 2 years – Honeywell Group

    The credit facilities accessed from First Bank were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards.

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    Billionaire watch: Oba Otudeko’s stakes in Firstbank and Honeywell are worth N10.3 billion

    The Honeywell Group has said that its loan with First Bank is being serviced as the conglomerate had reduced the facility by 30% in the last two and half years.

    This was disclosed by the Group via a statement issued on Sunday and seen by Nairametrics.

    According to the statement, the company and the bank have had a professional business relationship since 1975, which preceded the group’s investment in the bank over a decade later.

    According to the Honeywell Group, the credit facilities accessed from First Bank were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards.

    The Group further explained that following agreed terms, its facilities are adequately secured with First Bank with collaterals in place at over 170% of forced sales value and 230% at open market value.

    It stated, “In 2015, First Bank under the directive of the Central Bank of Nigeria, drew our attention to a 2004 circular (BSD/9/2004) which requires that insider related facilities must not exceed 10% of paid-up share capital.

    Based on this directive we subsequently entered negotiations with the bank to agree on an appropriate repayment structure and the final negotiated position was duly approved by the CBN.

    In addition to the above, First Bank, on the directive of CBN, requested additional security in the form of FBN Holdings Plc shares held by the Chairman of Honeywell Group, Dr Oba Otudeko citing a 2001 circular. This was duly provided through an authorisation to place a lien on the shares.”

    Honeywell Group has continued to meet all its obligations on its facilities with the bank according to agreed terms and has reduced its exposure by nearly 30% in 2.5 years. The facilities were charged at market rate and the bank continues to earn significant interest therefrom.”

    What you should know

    • Nairametrics had reported when the Central Bank of Nigeria directed Honeywell to fully repay its obligations to First Bank within 48 hours, warning that failure to do so would cause the CBN to take regulatory measures against the insider borrower and the bank.
    • The Chairman of Honeywell Group, Oba Otudeko, also served as Chairman of FBN Holdings Plc until he was asked by the apex bank to go along with other directors on Thursday.
    • The apex bank had noted in a letter last Wednesday that First Bank had yet to comply with regulatory directives on divesting its interest in Honeywell despite several reminders.
    • Also, the CBN asked First Bank to forward evidence involving the divestment of interest in Honeywell Flour Mills and Bharti Airtel Nigeria Ltd within 90 days.

    Download (PDF, 525KB)

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