Markets
Corporate Actions: A merger in the works and 5 new MDs
Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have an impact on the firms themselves or shareholders.
Examples of corporate actions include the payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.
Here is a review of corporate actions that took place this week.
Corporate Actions that held this week
Access and Diamond announce merger
This was the biggest corporate action that took place on the Nigerian Stock Exchange last week. After speculation, and even denial, Access Bank Plc and Diamond Bank Plc confirmed the merger talk.
As part of terms and conditions of the merger, Diamond Bank shareholders will get a payment of N1 per share and 2 Access bank shares for every 7 Diamond shares they own.
CEOs of the two banks Uzoma Dozie and Herbert Wigwe held a joint press briefing and an investor call following the announcement.
Access bank also sent a notice to the Nigerian Stock Exchange (NSE) of an Extraordinary General Meeting to be held on the 1st of February, 2019. The bank intends to raise N75 billion through a rights issue, to l boost its capital base ahead of the merger.
The move would make the resulting entity, the biggest bank in the country by asset size.
Investors piled into Diamond Bank, with the stock topping the gainers chart with a 57.89% gain.
Skyway Aviation Handling Company IPO extended
Skyway Aviation Handling Company Initial Public Offer, which was billed to end on Wednesday, 19 December 2018, will now close on Wednesday, 9 January 2019. The company is offering for sale 406,074,000 ordinary shares of 50 kobo each at N4.65 per share.
Cement Company of Northern Nigeria releases 9 months 2018 results
Cement Company of Northern Nigeria released its results for the nine months ended September 30, 2018. They showed a sharp increase in both top line and bottom-line.
Lafarge Africa Plc opens rights issue
Lafarge Africa commenced its N89.2 billion rights issue. The offer opened on Monday 17th December 2018 and will close on Wednesday 23rd January 2019.
A total of 7,434,367,256 shares will thus be issued at ₦12 per share, at the rate of 6 new shares for every 7 shares held by shareholders as at 4th December 2018 which is the qualification date.
Neimeth bounces back
Neimeth International Pharmaceuticals Plc released its results for the financial year ended September 30, 2018.
The company returned to profit-making as profit after tax stood at ₦184 million as against a loss of ₦411 million in 2017.
The company did not declare a dividend due to negative retained earnings but will give a bonus issue of 1 new share for every 10 held.
New CEOs appointed
Last week, five companies appointed Acting Managing Directors/CEOs.
Cutix Plc announced the appointment of Agnes Oduoye as Acting Managing Director, effective November 1, 2018, following the exit of the CEO, Ifeanyi Francis Uzodike.
Nigerian Aviation Handling Company Plc appointed Mrs. Olatokunbo Adenike Fagbemi as Acting Group Managing Director of the company with effect from 20th December 2018.
She replaces Mr. Idris Yakubu who resigned from the company with effect from 20th December 2018.
Prior to her appointment, she was a Non-Executive Director of the Company.
Mrs Modupe Oguntade, the Chief Financial Officer of Berger Paints Nigeria Plc (BPN), has been appointed as Acting Managing Director/Chief Executive Officer of BPN, effective January 7, 2019.
Oguntade will replace, Mr. Peter Folikwe, who will be exiting the board, having completed his four-year tenure as Managing Director.
Deji Mustapha was appointed Acting Managing Director of Morrison Pharmaceuticals Plc effective 10th December 2018. This follows the resignation of Nwabueze Oputa effective 30th of November, 2018
Adewale Adeyipo has been appointed Acting CEO of CWG Plc effective January 1, 2018. James Agada, the current CEO of will end his tenure by the 31st of December 2018. Agada was appointed in 2016 following the retirement of Austin Okere, a co-founder of the firm.
Linkage Assurance appoints Executive Director
Linkage Assurance Plc announced the appointment of Okanlawon Adelagun as its new Executive Director, Technical effective January 7, 2019.
Etranzact to raise N7 billion
Etranzact International, in a notice sent to the Nigerian Stock Exchange, disclosed its intentions to raise N7 billion either by equity/debt, or a combination of both.
The company’s management stepped down sometime this year, following an instruction by the CBN.
Proceeds will be used to upgrade and enhance the company’s technology infrastructure and network security systems, invest in an agent network expansion program, as well as human resources, and employee development.
Beta Glass may expand plant capacity
Frigoglass Plc (the parent company of Beta Glass Plc) has announced its intentions to invest €25 – €30 million to expand production capacity at the Beta Glass Guinea plant, located in Agbara, Ogun State.
Newrest ASL Nigeria Plc on its way out
Airline Services Limited (Newrest ASL) unveiled plans to delist from the Nigerian Stock Exchange. The company will seek shareholders’ approval for this at an EGM to hold on January 29, 2018.
The board of the company also authorized the Chairman, Richard Akerele, and CEO, Jonathan Stent-Torriani, to take all steps necessary.
Ecobank squashes rumours
Ecobank Trans International has denied rumors that there were overstatements in its balance sheet for the year ended 31 December 2017 and the three quarterly reports released during the 2018 year, emanating from incorrect exchange rates used.
The bank stated that as a policy within Ecobank Group, it used the official rate in the respective jurisdictions in which it operates to translate the results and balances of affiliates into the Group’s reporting currency, the US Dollar
It is however moving to the NAFEX rates, used by its peers. This was following approval by its board and was necessitated by most of its peers using the NAFEX rate. NAFEX stands for Nigerian Autonomous Foreign Exchange rate, and is arrived at independently by commercial banks.
Nigerian Breweries to appeal court judgment
Nigerian Breweries is to appeal a court judgment awarded against the company in a suit filed by Professor Ernest Izevbigie. Izevbigie had argued that the low sugar inscription on one of its brands was a trade trick.
The company has robustly denied this.
Unity Bank Plc
Unity Bank held its Annual General Meeting (AGM) last week. The firm is yet to issue any notice on resolutions agreed to at the meeting.
Continental Reinsurance
The firm held an Extraordinary General Meeting last week. Top on the agenda was obtaining shareholders’ approval for the purchase of minority holdings, or exchange with CRe Africa shares.
This would result in the delisting of the firm from the NSE.
Business News
Paypal’s Venmo now permits cryptocurrency trading
Venmo will support four different cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
Business News
ABCON asks CBN to check impact of cryptocurrencies on diaspora remittances
The association also noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfers.
The Association of Bureau De Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to introduce measures that will neutralize the positive effects of cryptocurrencies as a channel for diaspora remittances.
This is to redirect diaspora remittances away from cryptocurrency exchanges to official channels and also protect such against potential disruptions.
This call was made by ABCON during its Quarterly Economic Review for the first quarter of 2021 where it commended the CBN for the N5/$ rebate scheme introduced to encourage diaspora Nigerians to use official channels to remit their funds.
However, the association noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfers.
READ: Nigeria among worst countries to start a career, and they all don’t accept crypto
What ABCON is saying in their statement
The association in its statement said, “It is noteworthy that public acceptability for cryptocurrency exchanges are rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding Cryptocurrency a safe haven for their wealth in case of any eventuality.
In most Emerging Markets Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services. Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.”
READ: Atsu Davoh is building ways for Africans to easily acquire and spend cryptocurrency
According to ABCON, “Cryptocurrency transactions are faster than the conventional transfers, which require passing through banks reliant SWIFT, the sluggish, half-century-old interbank messaging system that handles cross-border payments.
These exchanges override the political complications of official channels. The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.
Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate. Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel.”
ABCON also expressed concerns over the country’s huge unemployment rate, urging the government to apply radical approaches with the use of both conventional and unconventional economic and political tools to redress the trend.
READ: Afreximbank President reveals ways Nigeria can boost diaspora participation in economy
What you should know
- It can be recalled that the apex bank had about 2 months ago, warned the Deposit Money Banks, Non-Financial Institutions and other Financial Institutions against doing business in crypto and other digital assets.
- The CBN directed financial institutions to immediately close the accounts of persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.
- The Securities and Exchange Commission (SEC) had a few days ago, revealed that it is working with the CBN for a better understanding and regulation of cryptocurrencies in the country.
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