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Business News

$9bn fine: P&ID open to settlement as court order to seize Nigeria’s assets is awaited

The founder of Process and Industrial Development (P&ID), Brendan Cahill has disclosed that the company is open to settling its disagreement with the Federal Government amicably despite a court scheduled for next week.

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Fuel Subsidy

The founder of Process and Industrial Development (P&ID), Brendan Cahill, has disclosed that the company is open to amicably settling its disagreement with the Federal Government despite a court verdict scheduled for next week.

Cahil said P&ID is prepared to settle with the Government on a reasonable basis if the government is willing. He, however, stated that the Government has been proving difficult, the same reason the company opted for a court ruling seven years ago.

“P&ID remains open to a settlement on a reasonable basis, but we need a willing partner in government to help resolve this matter. The onus is on the Nigerian government to act in good faith if they wish to find a solution.”

The Backstory: P&ID‘s contract with the Federal Government started in 2010 when the then-President Umaru Musa Yar’Adua authorised partnerships with private companies to develop the nation’s energy infrastructure in order to fix the power problem in Nigeria. P&ID signed an agreement with the Ministry of Petroleum Resources in January 2010.

Genesis of disagreement: P&ID had filed a lawsuit against Nigeria in 2012 after all attempts to negotiate a deal with the Government failed. A tribunal was organised in London under the rules of the Nigerian Arbitration and Conciliation Act as part of the original contractual agreement between the parties.

Initial court order: The the tribunal ruled that Nigeria was liable for $6.6 billion in damages, which by now has increased to over $9 billion with interest (more than $1 million in interest accruing daily). The amount is equivalent to almost 2.5 percent of Nigeria’s annual gross domestic product.

May court sitting: P&ID filed for approval from courts in the United States and the United Kingdom to enforce the award after the Government failed to obey the order by the tribunal. The company might end up seizing Nigerian assets in US and UK. The court sitting is slated for May 21, 2019.

Why Nigeria should worry: A hedge fund managed by VR Capital Group took a large stake (25%) in P&ID. With the backing of the hedge fund and Lismore Capital LtdP&ID hired lobbyists, lawyers, and a public-relations firm late last year to fight the case.

In a similar situation, creditors seized Argentina’s naval frigate while it was docked in Ghana.

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Fraudulent agreement: Cahill denies that the agreement signed with the Federal Government in 2010 was fraudulent. He said the arbitrators in London spent five years carefully reviewing the written agreement and all the facts surrounding the deal, concluding unanimously that Nigeria was to blame for the deal’s collapse.

The deal was promising: The deal between the Nigerian government and P&ID was supposed to fix Nigeria’s electricity issue, powering millions of household, Cahill said in the interview. According to him, it would have helped Nigeria reach its full potential, but Nigeria didn’t uphold its side of the contract.

Breakdown of the deal: Nigeria planned to pipe natural gas from two offshore oil rigs to a refinery that would be built by P&ID. The company founded in 2006 by two Irishmen, Michael Quinn and Cahill, was to remove hydrocarbons from the gas and send the fuel to Nigerian power plants.

It was revealed that P&ID wouldn’t get paid for the endeavor, but it could keep and sell the hydrocarbon byproducts, which themselves had value, with the government getting a cut.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Companies

Nestle declares N28.1 billion as final dividend for 2020

The Board of Nestle Nigeria Plc has announced the payment of N28.1 billion to its shareholders as the final dividend for 2020.

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Nestle declares N28.1 billion as final dividend for 2020

The Board of leading consumer goods company, Nestle Nigeria Plc, has announced the payment of N28.1 billion to its shareholders as the final dividend for the period ended 31st December 2020.

According to the announcement published by the company on the website of the Nigerian Stock Exchange, Nestle is expected to pay a final dividend of N35.50 per share for all the outstanding 792,656,252 ordinary shares of the company.

This brings the total dividend payout to qualifying shareholders to N28.14 billion.

The final dividend, however, will be paid electronically to shareholders on the 23rd of June, 2021, subject to appropriate withholding tax and approval at the Company’s Annual General Meeting.

Other key conditions outlined by the company for qualifying shareholders include:

  • Shareholders whose names appear on the registrar of members as of 21st of May, 2021 will be considered.
  • Qualifying Shareholders must have completed the e-dividend registration and must have mandated the Registrar (Greenwich Registrars) to pay their dividends directly into their bank accounts.
  • In line with this, the register of shareholders will be closed from 24th of May to 28th May 2021, to enable the registrar to process the dividends of Nestle’s shareholders.

In case you missed it

  • Nestle paid an Interim dividend of N25 per share to shareholders towards the end of 2020.
  • It is important to note that the addition of this to the final dividend of N35.5, puts Nestle’s total dividend for 2020 at N60.5 per share. This is 13.57% lower than the total dividend payout for 2019 (N70 per share).

What you should know

  • Nestle declared in its audited financial statement for 2020, that it made a profit before income tax of N60.6 billion in 2020. Indicating a decline of 14.74%, when compared with 2019 figures.
  • The company’s earnings per share (EPS) during the period under review was N49.47, 14.16% lower than 2019 EPS.

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Companies

MTN Nigeria declares largest ever revenue by a listed Nigerian entity for FY 2020

The strong revenue growth was basically due to its data-led segment as sales from the segment expanded by an impressive 51.5% Year to Year.

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UACN appoints Toriola as new Director 

MTN Nigeria recently announced another ground-breaking full-year turnover in the financial year of 2020, the highest ever recorded by a Nigerian listed entity.

Specifically, the telecom giant’s revenue expanded by 15.1% year-to-year to N1.3 trillion in the review period. The strong revenue growth was basically due to its data-led segment as sales from the segment expanded by an impressive 51.5% Year to Year.

  • Voice sales rose relatively by 5.6% year to year as the global switch to data-enabled communication subsisted.
  • MTN Nigeria Plc also announced a N5.90/share final dividend on impressive growth in its free Cash Flow for the financial year of 2020.
  • Notably, MTNN’s 4G network now covers 60.1% of the population compared to 43.8% in 2019.
  • According to MTN Nigeria, the suspension of new SIM registration enforced in mid-December did not have a material effect on the voice segment, which managed a 10.6% YoY revenue growth in Q4’20 (vs 7.0% YoY in Q3’20).

READ: MTN Group set to sell-off its 20% shareholding in BICS for $121million

In contrast, data revenue growth notably moderated to 37.5% YoY in Q4’20 compared to 55.5% YoY in Q3’20.

In a research report released by CardinalStone, the most valuable telecom company’s margin was adversely affected by currency devaluation;

“Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” the report stated.

READ: Analysis: Airtel is winning the data war

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The company’s margin was also negatively affected by the higher cost of borrowing and the ultra-low rates prevailing at Nigeria’s debt market;

“Net finance cost increased by 25.4% YoY on the impact of higher borrowings and lower interest on investment in government securities.

“Borrowings rose by over 26.3% to N521.2 billion in FY’20, after the company notably issued its N100 billion Commercial paper in June 2020. The effect of higher borrowings combined with a tax increase (a consequence of lower investment allowance and exempt income) to keep after-tax profit growth subdued at 0.9% YoY.”

That being said, in spite of its impressive growth in revenue the Stock was trailing by 3.28% trading at N174 per share.

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