Business News
UPDATE: Seplat Petroleum acquires Eland Oil & Gas
Seplat Petroleum Development Plc has just announced that it will be acquiring Eland Oil & Gas, following agreements by the companies’ boards of directors.
Seplat Petroleum Development Plc announced earlier today that it will acquire Eland Oil & Gas, an independent exploration company that was founded in 2009 and “listed on AIM, the London Stock Exchange’s growth market.”
According to a statement signed by Seplat’s Company Secretary, Mrs Edith Onwuchekwa and issued to the Nigerian Stock Exchange, the development follows the finalisation of acquisition agreements between the boards of both companies.
“Seplat Petroleum Development Company Plc (“Seplat” or the “Company”), a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, today notifies that the Boards of Seplat and Eland are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat (the “Acquisition”).”
Terms of agreement: The statement by the Seplat further disclosed that the deal will be effected through a scheme of arrangement in accordance with Nigeria’s Companies Act; part 26. Further details are summarised below.
- Every Eland Oil & Gas shareholder will receive 166 pence in cash per share.
- The entire issued and yet to be issued ordinary share capital of Eland Oil & Gas has been valued at approximately £382 million.
- On a fully diluted basis, this represents a premium of 28.5% to Eland’s closing share price of 129.2 pence on 14 October 2019.
- It also represents “a premium of approximately 32.6% to the three-month volume-weighted average price per Eland Share as of 14 October 2019 of 125.2 pence.”
- Any shareholder of Eland Oil & Gas whose name appears on the register as at close of business on Friday, October 18th, will stand a chance of receiving and retaining the interim dividend which the company is set to pay on October 31st, 2019.
In the meantime, the board members of Eland Oil & Gas believe that terms of this scheme of arrangement are “fair and reasonable”. In view of this, the directors have urged the company’s shareholders to vote in favour of this scheme during a court-ordered meeting, the date for which was not disclosed in the press statement.
A done deal? Apparently, Eland’s board of directors signed an undertaking that makes this agreement binding. In other words, Seplat Petroleum received an irrevocable undertaking, not just from the board of Eland Oil & Gas, but also from other stakeholders such as Helios Natural Resources Limited, Lombard Odier Asset Management (Europe) Limited, and
Richard I Griffiths. These entities are to ensure that the scheme is voted through during the court-ordered meeting.
“Therefore, as at the date of this Announcement, Seplat has received irrevocable undertakings to vote, or procure the voting, to approve the Scheme at the Court Meeting and vote, or procure the voting, in favour of the Resolution at the General Meeting with respect to a total of 129,727,705 Eland Shares, representing approximately 60.17 per cent. of the existing issued ordinary share capital of Eland. Further details of the above-mentioned irrevocable undertakings are set out in Appendix III to this Announcement.”
[READ: Seplat Petroleum’s H1 profit increases by 152.6%]
Good for Seplat: With this acquisition, Seplat Petroleum Development Company Plc is positioning itself to become Nigeria’s biggest oil exploration and production company. The company has so far remained profitable this year, with half-year 2019 profit increasing 152.6% to N37.5 billion.
Seplat’s stock is currently trading at N490 on the Nigerian Stock Exchange. This is slightly below the opening share price of N517, indicating that investors may be reacting lukewarmly to this development. But there really is no reason for them to be worried, seeing as Eland’s acquisition is expected to boost Seplat’s production output to 64,000 barrels per day. Eland Oil & Gas’s main asset is the OML 40 license in the Niger Delta.
[READ: Seplat exonerates self from $114m court judgement against Chairman]
Economy & Politics
FAAC disburses N682.06 billion to 3 tiers of govt in September [Full-List]
FAAC disbursed the sum of N682.06bn to the three tiers of government in September 2020.
The Federation Account Allocation Committee (FAAC) disbursed the sum of N682.06bn to the three tiers of government in September 2020. This is contained in the latest monthly FAAC report released by the National Bureau of Statistics.
According to the report, the federal allocation of N682.06bn disbursed to the three tiers (FG, States and LGAs) indicates a 1% marginal increase when compared to N676.4 billion disbursed in August 2020.
The Breakdown
A cursory look at the report showed that in September, the Federal Government received a total of N272.90bn (40%), States received a total of N197.65bn (21.6%) and Local Governments received N147.42bn (21.6%). The sum of N30.88bn (4.5%) was shared among the oil producing states as 13% derivation fund.
In addition, revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N6.66bn (1%), N13.48bn (2%) and N5.70bn (0.8%) respectively as cost of revenue collections.
Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that the sum of N196.56bn was disbursed to the FGN consolidated revenue account; N4.78bn was disbursed as share of derivation and ecology; N2.39bn as stabilization fund; N8.03bn was for the development of natural resources; and N6.12bn to the Federal Capital Territory (FCT) Abuja.
States federal allocation rose marginally
In September 2020, allocation to states rose by 3.4% to N197.65 billion compared to N198.8 billion recorded in the previous month.
The top five states with the largest share of monthly allocation in September are Delta (N13.8 Billion), Lagos (N11.44 billion), Rivers (N11.04 billion), Akwa Ibom (10.33 billion) and Bayelsa (N8.33billion). On the other hand, the top five states at the bottom of the ranking are Ekiti (N3.8 billion), Ogun (N3.7 billion), Plateau (N3.6 billion), Osun (N3.24 billion), and Cross River (N3.23 billion).
Key Takeaway
The federal allocation disbursed to the three tiers in September showed consistent improvement, when compared the previous months. However, this is still a short fall when compared to N740.87bn disbursed to the three tiers in the corresponding period of 2019.
The marginal growth recorded in the disbursed federal allocation may be due to the rise in revenue generation, on the back of earlier improvement in both domestic and cross border economic activities.
For states in Nigeria that largely depend on federal allocation to meet recurrent obligations, this may represent some sort of boost. However, the outbreak of the Covid-19 pandemic (second wave) currently emerging in some developed economies may threaten oil price (the country’s main revenue source), as industrial activities may collapse globally for the second time in the year.
Economy & Politics
WTO: Nigeria to persuade the US to join the consensus on Okonjo-Iweala – Trade Ministry
Nigeria is making moves to reach out to the US to agreed to appoint Okonjo-Iweala as Director-General of the WTO.
The Federal Ministry of Industry, Trade & Investment has said that Nigeria is currently reaching out to the United States and South Korea to back the WTO preferred candidate, Dr. Ngozi Okonjo-Iweala, for the role of DG of WTO.
This was disclosed in a statement by the Ministry and reported by Reuters on Saturday morning.
Recall that Nairametrics reported this week that the Ministry of Foreign Affairs announced in a statement that Nigeria’s candidate for Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, had secured the support of the majority of the member-nations – but was yet to be declared and returned as the winner, as the United States opposed the consensus.
Nairametrics also reported this week that Dr. Ngozi Okonjo-Iweala was close to being appointed as the new Director-General of the World Trade Organisation (WTO). A group of ambassadors also known as “troika” had proposed Okonjo-Iweala to lead the WTO, giving her a clear path to becoming the first woman to head the WTO since it started 25 years ago.
The U.S President, Donald Trump, blocked the appointment of Ngozi Okonjo-Iweala as the WTO’s next DG on Wednesday, declaring support for South Korea’s Yoo Myung-hee instead.
The Ministry said that the FG would try to persuade the United States to join the consensus, as most of the WTO’s members had agreed to appoint Okonjo-Iweala as DG.
“Nigeria is currently reaching out to all members of the WTO including the United States and South Korea to overcome the impasse as well as persuade the United States to join the consensus,” the trade ministry said.
Appointments
Dangote Sugar appoints Ravindra Singhvi as GMD/Chief Executive Officer
Mr. Ravindra Singhvi has been appointed as the substantive Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc.
The Board of Directors of Dangote Sugar has appointed Mr. Ravindra Singhvi as substantive Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc, effective October 30, 2020.
This disclosure was made by the company in a notification of the resolution of its board meeting, to the Nigerian Stock Exchange.
The statement partly reads:
“Dangote Sugar Refinery Plc. wishes to notify the Exchange and the investing public that at the Board of Directors Meeting of the Company held today, Friday October 30, 2020, the Board approved (a) the Unaudited Financial Statement for the Quarter Ended September 30, 2020, and (b) the appointment of the current Ag. Managing Director, Mr. Ravindra Singhvi as substantive Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc. effective October 30, 2020.”
What you should know
Prior to his new appointment, Mr Singhvi had been the ag. Managing Director of Dangote Sugar Refinery Plc since 18th June, 2019, after serving as the company’s Chief Operating Officer.
The Board’s stance on the appointment
The Board has stated that it is “confident that he is a great asset to the Company, particularly at this time when it is on a rapid growth trajectory, in view of its recent acquisition and it’s several backward integration projects (BIP) to position itself for further job creation in local plantations and factories, import substitution and deeper contribution to national economic development.”
Mr. Singhvi is wished the very best in his endeavors.
About Mr. Ravindra Singhvi
He has over 39 years of proven experience in leadership positions in Manufacturing and Processes in Sugar, Petrochemicals, Cement, and Textiles products industries in India.
He is a Chartered Accountant with background in Company Secretarial Practice, Corporate Governance and Management, and holds a Bachelor’s Degree in B.Com (Hons) and Law(I) from the University of Jodhpur, India.
Prior to joining Dangote Sugar Refinery Plc, Mr. Singhvi had served as the Managing Director & CEO of NSL Sugar Limited, Hyderabad, India, and Managing Director, EID Parry (1) Limited, Chennai, India, one of top three sugar producing companies in India.
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