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Lekoil to boost production output by listing on NSE

In order to boost its production output by threefold, Lekoil Limited is considering listing on the Nigerian Stock Exchange (NSE).

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Lekoil, NSE, Lekoil secures $11.5 million facility 

Lekoil Limited is considering listing on the Nigerian Stock Exchange (NSE), according to the company’s Chief Executive Officer (CEO), Lekan Akinyanmi.

Disclosing this in an interview in Lagos, Akinyanmi said the listing would be done in the company’s fate of boosting its production output by threefold over the next three years.

(READ MORE: MTN Nigeria to trade N90 per share on the NSE)

The oil and gas production firm, which currently trades on the London Stock Exchange (LSE), Akinyanmi said, is looking to appoint advisers in the next 12 to 18 months, and will probably list by 2022.

Lekan Akinyanmi, Lekoil

CEO, Lekoil Limited, Lekan Akinyanmi

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Lekoil’s production output: Considering Akinyanmi’s revelation, it is not erroneous for one to acknowledge that the company’s commitment to driving its production growth is second to none.

Akinyanmi, however, said that Standard Chartered Plc is leading a consortium that will raise about $170 million by the end of the year to fund infrastructure development. He said this investment will see output at Lekoil’s Otakikpo Joint Venture in Nigeria’s Niger Delta region rise to as much as 20,000 barrels a day from 5,800 barrels.

Lekoil is also looking to acquire marginal fields to boost its operations in the West African nation. Akinyanmi said, “We have always been lining up for the marginal-field bid rounds. Hopefully at some points, the government will actually pull the trigger.’’

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Why this matters: With the International Monetary Fund (IMF) forecast of 2.1% expansion in Gross Domestic Product this year (2019), up from 1.9% in 2018, Lekoil must have seen that Nigeria’s economic recovery after the recession is encouraging for investors.

When Lekoil finally lists, it will join the league of Johannesburg-based MTN Group Ltd., that listed in May 2019, and Airtel Africa Plc, which started trading on the country’s bourse last week.

[READ ALSO: Newrest ASL Nigeria Plc delists entire issued share capital from NSE]

About the firm: Lekoil is an Africa-focused oil exploration and production company with interests currently in Nigeria and offshore Namibia.

The company was founded in 2010 by a group of leading professionals with extensive experience in the international upstream oil and gas industry as well as in global fund management and investment banking.

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Famuyiwa Damilare is a trained journalist. He holds a Higher National Diploma (HND) in Mass Communication at the prestigious Nigerian Institute of Journalism (NIJ). Damilare is an innovative and transformational leader with broad-based expertise in journalism and media practice at large. He has explored his proven ability in the areas of reporting, curating and generating contents, creatively establishing social media engagements, and mobile editing of videos. It is safe to say he’s a multimedia journalist.

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ENDSARS

Lekki Tollgate Shooting: Sanwo-Olu insists on 2 deaths, no bloodstains at the scene

Governor Sanwo-Olu has reiterated that only two people were killed in last week’s shooting at the Lekki toll plaza.

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#EndSARS: Anyone found culpable in Lekki Toll Plaza shooting would be held accountable - Sanwo-Olu

The Lagos State Governor, Babajide Sanwo-Olu, has insisted that there were only two confirmed deaths during the shooting incident that happened a week ago at the Lekki Tollgate.

He also said that there were no bloodstains at the scene of the incident.

According to a report on Vanguard, the Lagos State Governor made the disclosure during an interview with CNN’s Becky Anderson about the incident and the fall out of the #EndSARS protests over police brutality and extra-judicial killing.

The Governor’s statement is against the backdrop of several reports in the public space, which had claimed that over 30 protesters and in some cases about 70 protesters allegedly died as a result of the shooting by soldiers at the Lekki Tollgate.

The Governor said, “Two dead bodies, that is what we have seen from all the morgues, that’s what we have seen going to hospitals, that’s what we have seen as a record. What has happened is that there have been so many footages that were seen, that people have shown, but we have not seen bodies, we have not seen relatives, we have not seen anybody truly coming out to say I am a father or a mother to someone and I cannot find that person. Nobody has turned up. I have been to the ground, there is no scratch of blood anywhere there.

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“From the footage that we could see, because there were cameras at that facility, it seems to me that they would be men in military uniform. That’s what the footage shows.”

While insisting that there was no form of international pressure as a result of the protests, Sanwo-Olu said, “I genuinely believe there would be change. For two reasons; what has happened, especially in Lagos is extremely unimaginable. It was also a clarion call for all of us in government to understand and realize what the youths want us to be doing. It hit all of us like a thunderbolt and it was just a wake-up call.”

In order to aid the investigation to ascertain what happened at the Lekki Tollgate, Sanwo-Olu assured that the Close Circuit Television (CCTV) footages will be made available to the judicial panel already set up to investigate the incident and has already started sitting on Monday.

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While responding to a question, Sanwo-Olu said he was ‘absolutely’ committed to a full investigation of the incident.

He said, “It’s beyond my control to mete out punishment to those found culpable; however, those responsible will be held accountable. I am not the Commander-in-Chief of the Armed Forces. The report will be out, we will channel the report to all the relevant authorities in the State to ensure everyone that is found culpable is accountable for the act.”

Despite the Lagos State Governor’s insistence on the number of fatalities, a lot of Nigerians do not believe his account of the incident and think that there is some form of an alleged cover-up by government officials. They are still outraged that despite some video evidence and accounts of people that were there, the government is still understating the fatality figures.

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Business News

Nigeria’s Manufacturing Sector contracts for 6th consecutive month

The manufacturing sector contracted for the sixth consecutive month as 8 subsectors contracted out of 14.

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Manufacturing: Momentum in activities slows in January, CBN’s forex intervention has encouraged influx of raw materials - Manufacturers , Manufacturing: Activity level slumps on COVID-19

The Manufacturing Purchasing Managers’ Index (PMI), for the month of October, witnessed a contraction for the 6th consecutive month, as it stood at 49.4 index points.

This was disclosed by the Central Bank of Nigeria (CBN), in its October PMI report released today.

READ: Manufacturing PMI dips further as recession scare looms

READ: FG set to create at least 5 million jobs for youths in the power sector – Minister of Power 

According to the information contained in the report, despite the fact that the Manufacturing Purchasing Managers’ Index (PMI) for the month of October contracted, the Manufacturing PMI index recorded a month-on-month increase owing to improved New orders, faster manufacturing supplier delivery time, and slight changes in production and employment levels.

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READ: FG meets group to access AfCFTA’s $650 billion market

What you should know

The report stated that, out of the 14 subsectors surveyed, 6 subsectors reported expansion (above 50% threshold) in the review month in the following order:

  • Electrical equipment
  • Transportation equipment
  • Printing & related support activities
  • Chemical & pharmaceutical products
  • Textile, apparel, leather & footwear
  • Cement

READ: Global Stocks rise higher, on positive Chinese manufacturing report

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READ: Nigeria’s inflation rate hits 13.71% as food prices soar

While the remaining 8 subsectors reported contraction (below 50% threshold) in the review month in the following order:

  • Primary metal
  • Petroleum & coal products,
  • Paper products
  • Fabricated metal products
  • Furniture & related products
  • Nonmetallic mineral products
  • Plastics & rubber products
  • Food, beverage & tobacco products

READ: The CBN data that can reveal whether we are already in a recession

PMI for the non-manufacturing sector stood at 46.8 points in October 2020, indicating contraction in Nonmanufacturing PMI for the seventh consecutive month. Of the 17 sub-sectors surveyed, 3 subsectors reported growth, while 11 subsectors declined.

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Corporate deals

CAP Plc set to merge with Portland Paints and Products Plc.

CAP Plc and Portland Paints have taken a decision to merge their respective businesses in accordance with applicable laws.

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CAP Plc

The Board of Directors of Chemical and Allied Products Plc (CAP Plc), and Portland Paints and Products Plc (Portland Paints), have decided to merge their respective businesses in accordance with applicable laws to drive growth and expansion within the Nigerian and African markets.

This is according to a press release signed by Bolarin Okunowo, the Managing Director of Portland Paints, made available on NSE, Monday, 26th October 2020.

READ: Big players in Paints and Coatings industry suffer 52% profit loss in the first 6 months of 2020

The completion of the proposed merger is subject to approvals being obtained from the Federal Competition and Consumer Protection Commission, the Securities and Exchange Commission (SEC), The Nigerian Stock Exchange (NSE), the Federal High Court, as well as shareholders of CAP and Portland Paints.

READ: Meet the woman winning in a male-dominated paint market 

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What you should know

  • Should the proposed merger go ahead, CAP Plc will emerge as the resultant entity.
  • The proposed merger will be executed by way of a Scheme of Merger (the “Scheme”) in accordance with Section 711 of the Companies and Allied Matters Act, 2020, and other applicable laws, rules, and regulations.
  • The Scheme will involve the transfer of all Portland Paints Plc’s assets, liabilities and business undertakings including real property and intellectual property rights to CAP Plc.
  • In consideration for the transfer, CAP Plc is offering shareholders of Portland Paints a choice to receive N2.90 cash for every Portland Paints share held OR 1 new ordinary share of CAP Plc, credited as fully paid up for every 8 Portland Paints shares held.
  • The proposed consideration represents a 45% premium to the last traded share price of Portland Paints Plc on October 16, 2020, being the last business day prior to the date on which CAP Plc sent its merger proposal to the Board of Portland Paints and a 41% premium on the trading price as at close of trading on October 23, 2020.

READ: GNI lists shares on NASD after delisting voluntarily from NSE 

What they are saying

Commenting on the proposed merger, David Wright, Managing Director of CAP, said, “The decision to pursue the proposed merger, is driven by the Board’s strategic plan to aggressively grow within the Nigerian and African markets.

“We believe that the Proposed Merger presents a unique opportunity that will benefit all stakeholders, from shareholders to customers, as well as the broader economy. I am excited by the prospect of an enlarged company with a broader decorative paint portfolio covering the premium, mid-market and affordable segments and the inclusion of marine and protective coatings, all of which will benefit our customers and shareholders.”

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READ: Africa Prudential tops losers list following mark down

The Managing Director of Portland Paints, Bolarin Okunowo, submitted that “In recent months, the Board and Management of Portland Paints have evaluated various strategic options with a view to positioning our company to capture emerging growth opportunities.

“CAP Plc’s business is complementary to ours, and both companies will be better able to serve our respective customers by coming together. I believe the combination of Portland Paints and CAP will yield significant benefits for all of our stakeholders.”

Mutual shareholder

Portland Paints and Products Nigeria Plc – with 85.98% of the company’s issued share capital owned by UAC Nigeria Plc, manufactures and sells decorative, industrial, and marine/protective coatings for the construction of oil & gas industries in Nigeria. Portland Paints is the Nigerian representative of Hempel. It is listed on the NSE.

Chemical and Allied Products Plc (CAP) – a subsidiary of UAC Nigeria Plc – which holds 51.49% of the company’s shares, manufactures and sells premium and standard paints and coatings, and is the sole technological licensee of Akzo Nobel Coatings International B.V. in Nigeria. It is listed on the NSE.

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