South African company, Momentum Metropolitan Holdings, has exited the Nigerian market by selling off its subsidiary in Nigeria as the National Insurance Commission (NAICOM) begin its shake-up process by downsizing the number of players in the Nigerian insurance market.
Momentum Metropolitan Holdings sold its 100% stake in Metropolitan Life Nigeria to Verod Capital Management, an investment firm based in Nigeria. This deal comes three years after Momentum Metropolitan acquired the 50% stake of United Bank for Africa to become majority stakeholder.
While it was stated that the exit of Momentum Metropolitan Holdings was due to its Reset and Grow strategy, there is also the recapitalization issue of NAICOM.
Why the sell-off? The acquisition occurred after NAICOM proposed an increment of the capital base for insurance firms. The regulator directed Life insurance underwriting firms to grow their capital base from N2 billion to N8 billion.
Before Momentum Metropolitan Holdings sold its shares, Metropolitan Life Nigeria accounted for about N2 billion capital base. Metropolitan Life Nigeria is a life insurance firm. Its full-year 2018 financial statement disclosed the company ended with N2.26 billion gross premium written from just N2 billion in 2017. The deal will enable Metropolitan Life Nigeria to meet the NAICOM requirement.
This is the second recapitalization process Metropolitan Life Nigeria will undergo, as the company had made a change of name from HEIRS Life Assurance Company Limited after a successful recapitalization about three years ago.
Mergers&Acquisition is expected to disrupt the insurance market’s status quo as the number of insurance companies have been projected to drop from 59 companies to about 25 just like the banking industry in 2004 after the Charles Soludo banking reform which positioned Nigerian banks on global competitive platform.
Why this is important: Mergers and Acquisitions of insurance companies is expected to strengthen the insurance market in Nigeria and accelerate its growth to make the sector as competitive as other countries.
Currently, the insurance penetration in Nigeria is 0.31% a rather extremely low rate compared to South Africa, India and other developing countries. But with this reorganization of the Nigerian insurance market, Coronation Research projects that insurance penetration in Nigeria could grow from 0.31% to 3.69% in 10-years.
What Verod see in such market? For Verod Capital Management, opportunities abound amidst slow growth of Nigeria’s insurance market, “Low levels of insurance penetration, even compared to other African economies, point to untapped opportunities within the sector,” Eric Idiahi a Partner at Verod said.
He added that NAICOM has taken necessary steps to create an enabling environment suited for the growth of the insurance market, “We believe that these actions, in addition to product innovation supported by increased public awareness and investments in technology-driven distribution channels, are the triggers that this sector needs to close the insurance penetration gap.” Idiahi concluded.
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Note: Verod Capital Management own a “minority” stake in Greensprings, one of Nigeria’s leading private schools. The investment company also have a key stake in Cscs Plc.
Verod also has an interest in Niyya Farm Group Limited, a holding company of an agro-processing business, among many other businesses.
Nigerian Governors who have tested positive for Coronavirus
Six Nigerian governors have contracted the novel coronavirus, but some have recovered.
On Saturday, July 4, Ebonyi State Governor, David Umahi announced that he had tested positive for COVID-19. This makes him the 6th Governor to have tested positive for the virus that has infected over 11 million and killed no less than 532,000 people globally.
Kaduna State Governor, Nasir El- Rufai was the first governor confirmed to have been infected and recovered in April.
Bauchi State Governor, Bala Mohammed, was also infected in March and was reported to have recovered on the 9th of April.
Oyo State Governor, Seyi Makinde, announced that he tested positive on 30th, March, 2020 and his recovery was reported on the 5th of April.
Ondo State Governor, Rotimi Akeredolu, tested positive last week on June 30th and Delta’s Ifeanyi Okowa announced that he and his wife had tested positive on July 1.
So far, the governors who have tested positive for COVID-19 are:
1. Nasir el-Rufai
2. Bala Mohammed
3. Seyi Makinde
4. Rotimi Akeredolu
5. Ifeanyi Okowa
6. David Umahi
Earlier this weekend, Benue State Governor, Samuel Ortom announced that his wife, Mrs. Eunice Ortom, their son, and some of the wife’s aides had tested positive for COVID-19.
With Nigeria and the rest of the world still battling to contain the dreaded virus, the total number of confirmed cases has risen to 28,167 from 148,188 tests carried out as at Saturday, July 4, 2020. In addition, while 11,462 have recovered, 634 persons have died.
BUA cement to build power and cement plants in Adamawa state
BUA Cement’s newest plant in Sokoto is expected to be operational in 2021.
BUA Cement has announced plans to build a 50 megawatts power plant and 3 million metric tonnes cement plant in Lamurde and Guyuk local governments in Adamawa States.
BUA Cement which is Nigeria’s second-largest cement producer by volume with plants in Sokoto and Edo States, with the projects wants the boost the country’s power supply and increase the local production capacity for cement.
This was disclosed by the Chairman of BUA Cement, Abdul Samad Rabiu, in a press statement on Sunday, July 5, 2020, in Lagos.
The BUA Cement Chairman who led the company’s management team on a courtesy visit to the Adamawa State Governor, Ahmadu Umaru Fintiri, after preliminary findings showed that Guyuk and Lamurde areas had quality limestone.
According to Rabiu, “Preliminary findings show that the two local governments of Guyuk and Lamurde are reputed to have good quality limestone deposits and BUA Cement is ready to begin the investment in the state.
“BUA will use new technologies to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing three thousand direct and five thousand indirect jobs.
“Guyuk Cement Plant will be a major investment in the North-East by BUA, while we solicit the support of Gov. Umaru Fintiri to set up the factory in Guyuk.”
He added that while the company has invested billions of dollars in various sectors across Nigeria, it has taken a decision to source its raw materials locally and therefore urged the Adamawa state government to support BUA to actualize the GUYUK Cement project.
The Adamawa State Governor, Ahmadu Fintiri, in his response assured the Chairman and management team of BUA, that the state government would provide all the necessary support and make available whatever was needed to make the projects a reality.
BUA Cement’s newest plant in Sokoto is expected to be operational in 2021 and expects that its total production capacity will get to 14 million metric tonnes of cement per annum upon the completion of Guyuk Cement Plant.
BUA Cement has been having a running battle with Dangote Cement over the ownership of 3 mining sites in Obu and Okpella in Edo State. The mining sites have been subject of legal tussle between the 2 biggest cement companies in the country.
GSK, Sanofi to agree $624 million deal with UK for COVID-19 vaccine
Both GSK and Sanofi said that they are placing more priority on quality rather than speed.
British and French pharmaceutical giants, GlaxoSmithKline (GSK) and Sanofi are close to reaching a $624 million (500 million pounds) deal with the United Kingdom (UK) government for the supply of 60 million doses of coronavirus vaccine as many countries move for possible COVID-19 treatments.
Reports suggest that the UK was considering an option to buy the vaccine should the human trials, which are due to commence in September 2020, turn out successful.
The funds would be paid in stages as the vaccine progresses, with the final payment made on delivery.
In order not to be left behind, the UK government has been engaging a wide range of companies both at home and abroad to negotiate access to vaccines. They said that the right announcements of these arrangements will be made as and when agreements with any of these companies are finalized.
The British business ministry’s spokeswoman, who confirmed that the ministry is handling Britain’s supply of potential COVID-19 vaccines, said talks were going on with different parties about access to possible vaccines but didn’t confirm if GSK/Sanofi project was one of them.
According to the ministry official, ‘’The Government’s Vaccines Task Force is actively engaging with a wide range of companies both in the UK and abroad to negotiate access to vaccines.”
“Appropriate announcements of these arrangements will be made as and when agreements with any of these companies are finalized and signed.”
Sanofi is presently working on 2 possible COVID-19 vaccines, one of which uses an adjuvant made by GSK to potentially boost its efficacy. The timeline for its clinical trials is behind the likes of Moderna Inc, the University of Oxford in collaboration with AstraZeneca Plc and an alliance of BioNTech and Pfizer Inc, whose projects all made headlines by moving to human trials as early as March.
Both GSK and Sanofi said that they are placing more priority on quality rather than speed in developing a vaccine.