Aso Savings and Loans, Union Homes Savings & Loans, Nigerian German Chemical, Multi-Trex Integrated Foods, and 15 others have made the Nigerian Stock Exchange’s Caveat list, as they appear to be distressed.
Also on the list are DN Tyre & Rubber Plc (former Dunlop Nigeria), Roads Nigeria, Anino International, Juli Plc, Unic Diversified Holdings, Omatek Ventures, Staco Insurance, FTN Cocoa Processors, Capital Oil, Guinea Insurance, Goldlink Insurance, and Resort Savings & Loans, among others.
What it means: According to the NSE’s X-Compliance Report, which was released on September 20, 2019, the companies, have failed to comply with minimum listing standards of the bourse as some of them have consistently failed to file their audited financial statements since 2014.
For instance, Nigerian German Chemicals, DN Tyre, Union Homes Savings & Loans, and Aso Savings & Loans have not sent their 2014 – 2019 audited results to the exchange. While Omatek, Evans, Unic Diversified, Juli, Anino, Multi-Trex failed to file their results since 2015, Roads, Staco Insurance, Goldlink, FTN Cocoa, Capital Oil, Guinea Insurance, Resort Savings, Standard Alliance Insurance, International Energy Insurance fall in the category of firms that have not submitted their 2017 and 2018 reports, respectively.
Why they may be up for sale: The sanctions for non-compliance, according to issuers’ rules, states:
- N100,000 per day for the first ninety (90) calendar days of non-compliance.
- N200,000 per day for the next ninety (90) calendar days of non-compliance.
- N400,000 per day thereafter until the date of submission.
What it means: With the above fines, it means that the companies which have not filed their reports since 2014 are seriously indebted to the exchange. That means DN Tyre & Rubber, Nigerian German Chemicals, Union Homes Savings & Loans and Aso Savings & Loans are expected to pay about N623 million to the purse of the exchange if they want the management of bourse to lift the ‘Caveat Emptor’ (Buyers beware) embargo placed on their shares.
Breakdown of firms’ liquidity: Investigations conducted by Nairametrics revealed that the last result posted by Nigerian German Chemicals Plc, not submitted to the NSE for obvious reasons, was its 2015 Half Year (H1). The pharmaceutical firm’s profit after tax (PBT) dropped by 37.9% from N79.6 million to N49.4 million.
Nairametrics found in the results that the company was indebted to its creditors to the tune of N2.71 billion. It stated that the company owes bank overdrafts, commercial papers, Term loans, Trade payables, other payables & Accruals and taxation, among others worth N637 million, N182 million, N456 million, N306.3 million, N818.5 million and N257.8 million respectively.
In the case of DN Tyre and Rubber, the company has been witnessing a lull since it shut down its tyre manufacturing business in 2008 pending the improvement of business operating environment in Nigeria. According to its 2015 H1, which was the last result it posted, its loss after tax dropped from N346.4 million to N43.7 million.
Also, its credit portfolio stands at N845.1 million. While Trade is worth N126.1 million, the Accruals and others, Term loans, and Sundry creditors are worth N63.9 million, N100 million and N554.9 million respectively. These are different from the brought forward tax worth N52 million.
Aso Savings & Loans: Nairametrics found that the results of the company were frequently posted till 2012. Between 2013 and 2016, the financials are missing even on the site of the firm. In 2016 and 2017, Aso Savings posted summary its first quarter interim statements.
It managed to grow its PBT from a loss of N12.4 million as at March 2016 to a profit before tax of N10.4 million by end of March 2017, as well as witness the increase of the bank’s total liabilities from N73.3 billion to N76.6 billion within the same period.
Like Aso Savings, Union Homes has not been consistent in posting its results. The last time its investors and stakeholders heard from the bank was in 2015, when it posted its Q3 15 unaudited account. It posted a loss after tax of N67 million, lower than the N1.3 billion declared in 2014. The bank’s total liabilities also stood at N36.2 billion.
Buhari to finally send Petroleum Industry Bill to National Assembly next week
Sources in the Presidency have disclosed that the President may be presenting the bill to the National Assembly.
President Muhammadu Buhari is expected to present the long-awaited Petroleum Industry Bill (PIB) to the Senate as early as next week.
According to Reuters, who were quoting 4 sources familiar with the development, the presentation of the bill to the National Assembly, follows its official approval by the president late last week. This is as the National Assembly has already formed teams of members that will work most closely on the individual portions of the bill.
Both chambers of the National Assembly must have to pass the bill after deliberating on it before it can then be passed on to the president for his final signature.
The PIB which is an oil reform bill has been in the works for about 20 years, is key to the repositioning of Nigeria’s Oil and Gas Industry under its post-COVID-19 agenda as the main laws governing oil and gas exploration have not been fully updated since the 1960s due to some contentious issues like taxes, payments to local communities, terms and revenue sharing within Nigeria.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), had disclosed that the delay and non-passage of the bill has made international investors to start losing confidence in the country’s oil and gas industry.
While revealing last month that the PIB will be presented to the National Assembly in the next few weeks, the Minister of State for Petroleum Resources, Timipre Sylva, also said that the executive arm will be requesting the lawmakers to specially reconvene to receive and start deliberations on the bill.
These oil reforms and regulatory certainty became more pressing this year as low oil prices and a shift towards renewable energy made competition for investment from oil majors tougher.
The draft copy of the bill which was prepared by the Petroleum Ministry is a product of series of consultation between the federal government, oil and gas companies and other industry stakeholders.
Excerpts from the bill reported by Reuters include provisions that would streamline and reduce some oil and gas royalties, increase the amount of money companies pay to local communities and for environmental clean-ups alter the dispute resolution process between companies and the government.
It also included measures to push companies to develop gas discoveries and a framework for gas tariffs and delivery. Commercializing gas, particularly for use in local power generation, is a core government priority.
UK-based group to investment $245 million in 100 Nigerian businesses
A UK based organization is to partner local investment funds to disburse $245 million to 100 Nigerian businesses.
A UK-based development finance institution, CDC Group, has finalized plans to invest US$425 million as an aid to 100 businesses and 38,000 jobs in Nigeria.
This is sequel to its partnership with 40 investment funds such as Afreximbank, African Capital Alliance and Indoram, NAN reports
In a virtual visit to the country by the board of the organization led by Chief Executive, Nick O’Donohoe and Chairman, Graham Wrigley, the UK Government-funded organization stated that all earnings from its investments are ploughed back to improve the lives of millions of people in Africa and South Asia.
CDC Group noted that it paid a virtual visit to the Vice President of Nigeria, Prof. Yemi Osinbajo, and British High Commissioner to Nigeria, Catriona Laing, to discuss and ascertain the impact of CDC’s aid to its investees through the COVID-19 crisis and understand how to stimulate recovery and growth.
The discussions also focused on CDC’s own response to the pandemic through its preserved, strengthen and rebuild programme, the statement said
Commenting on the rationale of the aid, the Chief Executive of the CDC Group, Nick O’Donohe said that, “Nigeria plays a key part in our strategy of partnership and investment for economic growth in West Africa. “Hosting our 2020 board trip– albeit virtually – in both markets is a testament to our commitment.
“Looking forward, we will continue to prioritise the post-COVID-19 recovery as part of the Build Back Better agenda.
“We are committed to supporting a deeper and more strategic bilateral partnership between the UK and Nigeria that is based on enhancing economic development, job creation, inclusion, trade and investment,” O’Donohoe further remarked.
In a glowing tribute and commendation to the group, British High Commissioner to Nigeria, Catriona Laing CBE said CDC has been pivotal to creating jobs and supporting the growth of businesses by investing in the poorest countries across Africa, including Nigeria.
“CDC’s commitment to the country signals to other UK investors that investing in Nigeria is possible and should be prioritized in order to help Nigeria and indeed, Africa, mitigate the impact of COVID-19,” the envoy said.
Just-in: Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN
The CBN disclosed in its September PMI report that the manufacturing sector contracted.
The Manufacturing Purchasing Managers’ Index (PMI), in September 2020, has witnessed a contraction for the fifth consecutive month, as it stood at 46.9 index points.
This was disclosed by the Central Bank of Nigeria (CBN), in its September PMI report released on Wednesday.
The report stated that, out of the 14 subsectors surveyed, 4 subsectors reported expansion (above 50% threshold) in the review month in the following order:
- Electrical equipment
- Transportation equipment
- Cement, and
- Nonmetallic mineral products
The paper product subsector was stable.
While the remaining 9 subsectors reported contraction (below 50% threshold) in the review month in the following order:
- Petroleum & coal products
- Primary metal
- Furniture & related products
- Printing & related support activities
- Food, beverage & tobacco products
- Textile, apparel, leather & footwear
- Chemical & pharmaceutical products;
- Fabricated metal products and
- Plastics & rubber products
The Non-manufacturing sector PMI stood at 41.9 points in September 2020, indicating contraction in nonmanufacturing PMI, for the sixth consecutive month.