Egyptian vehicle hailing company, Swvl, has announced it will be making an inroad into Nigeria’s ridesharing market to offer services which the likes of Uber and Bolt are yet to offer Nigerians. However, it will meet a fierce challenge from yellow (commercial) bus operators.
The Founder and Chief Executive Officer of Swvl, Mostafa Kandil, said the company is planning to expand its market base to two or three African countries. Lagos will probably be the first location to set sail.
“The plan is to be in at least two or three more African cities by the end of the year… Lagos, Nigeria, is most likely the next market.”
Lagos is one of the biggest markets for ridesharing companies. Uber provided 30% more rides in this location than it did in London in its first 16 months of operating there.
Why this matters: Swvl is entering the market to offer bus hailing service which Uber and Bolt have yet to started to explore in Nigeria. Note that bus transportation is the most popular means of commute. Since Lagos has an estimated population of 21 million people (the largest city in Africa), the customer base offers vast revenue potential for the bus hailing market.
Swvl will have the first mover advantage when it begins operations by the end of the year, tapping into the middle class and upper middle class; a segment that Kandil said public buses in emerging markets don’t really serve.
Note that Uber has been operating this bus service in Cairo since 2018 where the company is in competition with Swvl and Careem for demand. Uber recently acquired Careem.
What you need to know: The Egyptian tech company secured $42 million to push this expansion drive. The funding was raised from venture-capital firms such as Sweden’s Vostok, Dubai-based BECO Capital, China’s MSA and Endeavor Catalyst, based in New York.
Swvl also partnered with Ford: The agreement will see the Ford Transit minibus as the preferred vehicle of choice on Swvl’s routes, although this partnership is within Egypt, but with the company entering Nigerian market, the usage might extend to the country as well.
The company has been active in fundraising in the past three years, securing $8 million and over $20 million in 2018 alone before securing it’s latest $42 million cash-support. Swvl’s fundraising keeps growing, which shows investors are keen on the prospect of the company.
A possible setback: While Uber and Bolt have never disclosed their reason for completely ignoring the bus-hailing service in Nigeria especially, it could be linked to low-income commuters’ preference for the yellow-buses which provide cheaper alternatives.
Despite Swvl’s attempt to position the bus-hailing service as a cheaper option compared to taxis and car-hailing, it should be known that commercial buses are different from the regular yellow taxis which were relegated by car-hailing companies. Lagos yellow buses have a stronger root among Nigerians and will remain cheaper than Swvl, regardless of the company’s price offering.
The yellow buses may be perceived as dangerous, yet they remain very reliable when it comes to accessibility. Therefore, the only thing that may endear Swvl’s service to Nigerians if it is willing to offer the home pickup option like the car-hailing service and exclude the per meter or miles form of charges which is synonymous to vehicle hailing service.
Regardless, Swvl should not expect the same level of acceptance Uber and Bolt (Taxify) experienced in Nigeria, as this bus service disruption will hit several stumbling blocks. The challenges will range from maneuvering traffic just like commercial buses are known to do. They may also face opposition from the National Union of Road Transport Workers (NURTW), a rather strong association with political backing. This is unlike the yellow taxi association.
About Swvl: The Egyptian app for booking buses was established by Mostafa Kandil, an engineering graduate who was a former employee of Careem.
Dangote Sugar completes acquisition with Savannah Sugar Company Limited
Dangote Sugar Refinery will henceforth assume all legal proceedings.
Dangote Sugar Refinery has been authorised to receive all the assets, liabilities and business undertakings, and property rights of Savannah Sugar Company Limited (SSCL).
This was one of the resolutions passed at the court-ordered meeting of the members of Dangote Sugar Refinery Plc held on Thursday at the Eko Hotel & Suites, Victoria Island, Lagos.
According to the notice of the proceedings sent to the Nigeria Stock Exchange, and seen by Nairametrics, Dangote Sugar Refinery “is hereby authorised to receive all the assets ((including all tax attributes, unutilized capital allowances, tax losses, withholding tax credits and any other tax refunds available subject to the approval of the FIRS), liabilities and business undertakings, including real property and intellectual property rights of Savannah Sugar Company Limited (“SSCL”) transferred by SSCL to the Company (pursuant to the Scheme of Arrangement between SSCL and its shareholders) upon the terms and subject to the conditions set out in the Scheme of Arrangement without any further act or deed”.
Dangote Sugar Refinery will henceforth assume all legal proceedings, claims and litigation matters pending or contemplated by or against Savannah Sugar.
In view of this acquisition, the court also ordered Dangote Sugar Refinery to issue and allot to the shareholders of Savannah sugar, 146,878,241 ordinary shares of N0.50 each in the share capital, for the 162,756,968 ordinary shares held by the Scheme Shareholders in SSCL.
The Scheme Document dated Friday, May 29, 2020, was also approved at the meeting, and Directors of DSR were authorised to consent to any modifications that the Securities and Exchange Commission may deem fit, and give effect to the scheme.
Dangote Sugar Refinery had earlier sent a disclosure notice to the NSE, announcing its plans to acquire Savannah Sugar Company Limited, subject to the approval of both company shareholders.
Dangote industries recently sold its flour subsidiary, and this acquisition is part of an expansion strategy for Dangote Sugar Refinery, and the next stage of its backward integration plan to revolutionize the sugar sub-sector of Nigeria’s economy.
Fairfax Africa Holdings enters purchase agreement with Helios Holdings Ltd
Fairfax Africa Holdings Corp. agreed to merge with Helios Holdings Ltd.
Canada-based Fairfax Africa Holdings Corporation has reached an agreement to merge with Helios Holdings limited, the Africa-focused private equity firm which was co-founded by Tope Lawani and Babatunde Soyoye. The purpose of the merger is to create a truly pan-African investment firm.
A statement made available by Fairfax, as seen by Nairametrics, noted that when the deal is finalised, Fairfax Africa Holdings Corporation will be renamed Helios Fairfax Partners Corporation. The company will remain listed on the Toronto Stock Exchange and the Helios co-founders will be joint Chief Executives of the new company.
The terms of the deal will also require Helios to exchange 45.6% of equity and voting interest in the new company. Helios will contribute its performance and management fees through its present and future holdings under the Helios funds, thereby making Helios Fairfax Partners Corporation one of the biggest Africa-focused asset management firms by complementing the experiences and funds of both companies under one umbrella.
The new company will also have a larger capital base for diversified investment inflows to the continent through years of experience in third-party investment management operations and the support of longer-term institutional shareholders.
The main objectives of this deal are summarised below:
- Helios Fairfax Partners Corporation to become the leading pan-Africa focused listed alternative asset manager with unique capabilities to invest across the continent
- Creates a diversified investment platform combining best in class third-party investment management capabilities with the strength of long-term shareholders in a permanent capital vehicle
- Provides an enlarged capital base, increasing capacity to invest as well as to launch additional and differentiated Africa focused asset management strategies and initiatives
- Reinforces the parties’ shared long-term commitment to be a consistent and trusted provider of capital to growing African businesses across market cycles
- Tope Lawani and Babatunde Soyoye, the co-founders and Managing Partners of Helios Investment Partners LLP, will become joint CEOs of the combined holding company, enabling the company to build on the track record they have established over the last 15 years
In his remarks, Tope Lawani disclosed that the deal will offer emerging market investors the opportunity to gain exposure to the continent through their portfolio.
“We take a long-term view on our investments, and many have proved resilient even in this pandemic with a number of our investments in sectors such as telecommunications, payments, and food,” Lawani said.
He added that the transaction will offer Helios access to permanent capital from equity markets that can be used to accelerate its product and growth strategy.
Helios, which was founded in 2004, has raised third party private capital for the past 15 years investing in Africa companies including First City Monument Bank (exiting in 2013), Interswitch, Vivo Energy and Helios Towers Plc.
Fairfax was founded by Canadian Billionaire Prem Watsa and will own 45.6% of the Helios Fairfax Partners Corporation. Before the merger, Helios was raising $1.25 billion for its Africa focused fund and had landed a commitment of $100 million from the U.K’s CDC Group.
You may read the full statement by Fairfax by clicking here.
Access Bank in advanced discussions with Zambian Bank regarding merger
The bank noted that there are no guarantees to whether the transaction pans out or not.
Access Bank Zambia Limited announced that it is now in advanced discussions with Cavmont Capital Holdings Zambia Plc. regarding possible merger of Cavmont Bank Limited. The announcement was disclosed by Nigerian Stock Exchange (NSE) in a corporate disclosure which was duly signed by the Company Secretary, Mr. Sunday Ekwochi.
The disclosure by the bank read, “Access Bank Plc (“Access Bank”) announces today that its wholly-owned subsidiary in Zambia, Access Bank Zambia Limited (“Access Bank Zambia”) has entered into exclusive discussions with Cavmont Holdings Zambia Plc (“Cavmont Capital”) regarding a potential transaction between Access bank Zambia and Cacmont Bank Limited (“Cavmont Bank”), a wholly-owned subsidiary of Cavmont Capital. The potential transaction relates to the sale of 100% of Cavmont Capital interest in Cavmont Bank to Access Bank Zambia.”
The bank has, however, noted that there are no guarantees as to whether the transaction pans out or not. “There can be no certainty that a transaction will be agreed, nor as to the terms of any such agreement. The completion of a transaction would be subject to formal regulatory approvals. Access Bank will update the market as appropriate and in accordance with its disclosure obligations.” It also advised shareholders accordingly, to exercise caution when dealing in Access Bank’s securities until a full announcement is made.
Nairametrics had reported in October 2019 that Access Bank from the first quarter of 2020, would expand its footprint across Africa. After its merger with Diamond Bank, it acquired 100% of Kenya’s Transnational Bank Plc and its 28 branches, as the Central Bank of Kenya (CBK). Three months later, it also notified the Nigerian Stock Exchange of its intention to establish a subsidiary in Cameroon.
Access Bank Plc. recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020. This was bolstered by an increase in Net interest income which stood at N72.2 billion, indicating a 27% increase compared to N56.8 billion that was recorded in Q1 2019.
Its shares at market open today stood at N6.40, on the lower end of its 52-week range of N5.30 and N12.00. It’s price to earnings ratio was 2.24 and price to book, 0.3566.