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TAK Group raises N15 billion bonds, records 113% oversubscription of first bond issue

TAK Agro Plc has raised N15 billion senior secured bonds issue for the purpose of transporting fertilizer and food grains across Nigeria.

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Agric firm raises N15 billion bonds, records 113% oversubscription of first bond issue

TAK Agro Plc, an agro-allied company has raised the sum of N15 billion senior secured bonds for the purpose of transporting fertilizer and food grains across Nigeria.

The bonds issue is the first in the agricultural value chain market and was raised with the help of Planet Capital, an investment-banking boutique registered with the Securities and Exchange Commission (SEC)

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Why this matters

According to the Managing Director of the Group, Mr Chuma Henry Maduekwe, the company is engaged in the movement of fertilizer raw materials, such as imported phosphate and potash to various fertilizer blending plants under the Presidential Fertiliser Initiative (PFI). The company makes an estimation of 34,000 truck trips of fertilizer in six months.

Agric firm raises N15 billion bonds, records 113% oversubscription of first bond issue

However, the company has no truck of its own and relies on third-party transporters to meet its requirement, hence the need for bonds raise to boost its logistics arm.

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What we are building is a Pan-African agriculture platform. However, during the process of delivering fertilizers to working with a lot of agric related companies to enhance crop yield, it was clear that we needed to control our logistics.

“Prior to now, we listed third party logistics companies to support our operations but with what we are trying to do, it is clear to us that there is a need for us to control that end of the chain. We are coming out with the first bond to acquire the first 250 trucks. In the first instance, from our calculation, we required 1000 trucks for our immediate operations. As a first step, we are coming to the market to acquire the first 250 trucks and we will add to that in the subsequent years,” he said.

[READ MORE: Interswitch records successful sale of first bond issue]

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Chairman, TAK Agro Plc, Mr Thomas Etuh could not hide his excitement about the bond raise. Giving an overview of the company, he noted that the company began to trade commodities like salt before moving into agro-allied products like fertilizers.

TAK Group wants to build a Pan-African integrated agric solution. It started by trading in salts, fertilizers and cotton. Today, we are the largest producer of NPK fertilizer in the country with an installed capacity of 3 million MT and demand in the country is 4 million. All these cannot be achieved because of lack of logistics. we all know the state of the roads and situation of the railways.

“In six months, the group moves raw materials of fertilizers to various blending points and requires 34,000 truck trips in 6 months. This means we move 1 million metric tonnes of raw materials. If we go to our installed capacity, we are talking about 100,000 truck trips a year. As the MD said, we are starting with 250, our requirement is 2,000,” Etuk said.

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Agric firm raises N15 billion bonds, records 113% oversubscription of first bond issue

What you should know

Etuk said that the bonds were oversubscribed by 113%. He noted that the fertilizer company would soon launch its Initial Public Offering (IPO) by the second quarter of next year. In addition, the Chairman boasted of some of the group’s achievements which include the acquisition of silos across the country in Abuja, Kaduna, Jigawa, Kwara and Kebbi with 2061000 metric tonnes capacity to store grains. He hinted at another bond raise of N50 billion which is soon to come.

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Patricia

Reincarnated as a lover of stocks, Angel investors, seed funds, and anything aligned to tech or startups raising money, Joseph's work at Nairametrics involves following the money to wherever it leads. Before joining Nairametrics, he won an investigative journalism fellowship with ICIR, appeared in several national dallies, with hard-hitting opinions, features and investigative pieces. He has also engaged in content marketing and copywriting for a top e-commerce firm in Nigeria.

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Coronavirus

COVID-19: We may recommend lockdown to ensure Nigeria’s safety – PTF

PTF on COVID-19 on Monday, Mustapha warned that the deadly virus is still spreading at an alarming rate.

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COVID-19: Reactions trail FG travel ban on 13 countries

The Secretary to the Federal Government and Chairman of the Presidential Task Force on COVID-19, Boss Mustapha, disclosed yesterday that the PTF will not shy away from the possibility of another lockdown, adding that the PTF will recommend it to the President who will make the final decisions.

While speaking during the national daily briefing by the Presidential Task Force (PTF) on COVID-19 on Monday, Mustapha warned that the deadly virus is still spreading at an alarming rate.

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“Therefore, we cannot afford to slow down and we must never compromise. Let us continue to learn from the history of pandemics by avoiding the mistakes of 1918.

“What happened in 1918 was very simple. During the Spanish Flu, it lasted for 2 years and in three waves, and during that period of time, 500 million people were infected, out of which they recorded fatalities of about 50 million persons. But the dangerous phase of the flu was the second phase,” Boss Mustapha said.

He added that the Spanish Flu lasted for 2 years of 1918 came in 3 waves, but the phase the most casualties were recorded was in the second phase. Adding that the impatience of people forced governments to lift lockdowns, and by the time the second wave arrived, millions died.

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READ MORE: FG may lift ban on interstate movement on June 21

He acknowledged that the possibility of lockdown would not be popular with Nigerians, however, “but what will happen in the preceding weeks will determine”, citing rising cases in the United States after the holiday weekend and a the newly imposed lockdown in Madagascar despite developing its “herbal cure”.

“I believe as the days and weeks ahead will present, we will not speculate what will happen in the future but we will do everything within our mandate to ensure the safety and protection of the people of Nigeria. If that will recommend a prescription of a lockdown, this task force will not shy away from its responsibilities.”

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He added that the recommendations of lockdown would be passed to President Buhari who will decide in the next 2 weeks.

“The PTF urged Nigerians to be vigilant, citing global developments in coronavirus in the past week from China to the United States.

“We urge that vigilance and care should be exhibited by all Nigerians irrespective of status. This virus does not discriminate and the PTF shall keep sustaining its sensitization messaging,” Mustapha stated.

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Financial Services

Why African Alliance has not released its FY 2019 and Q1 2020 results

The company was originally supposed to release the full-year 2019 financial statements in March this year.

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African Alliance Insurance Plc

African Alliance Insurance Plc announced yesterday that the reason it has been unable to file its audited financial statements for full-year 2019 and unaudited financial statements for Q1 2020 is that the National Insurance Commission (NAICOM) has not given approval to this effect.

The insurance firm was supposed to have released the full-year 2019 financial statements since March this year. However, it obtained permission from the Nigerian Stock Exchange to extend the deadline to June 30th, 2020. Interestingly, the FY 2019 financial report was not still filed within the extension period due to the reason stated above.

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The company said it is deeply regretful of the inconvenience this delay may have caused its stakeholders. In the meantime, it is working towards ensuring that the financial statements are filed latest by the end of July. Some parts of a statement issued by the company said:

“African Alliance Insurance Plc wishes to notify its esteemed shareholders and other stakeholders that the Company’s Audited financial statements for the year ended 31st December 2019 (AFS) together with the Unaudited financial statements for the period ended 31st March 2020 could not be filled within the period of the extension granted by the Nigerian Stock Exchange (30th June 2020).

“However, the Company has since concluded with the auditing of its accounts and has submitted same to its primary regulator (the National Insurance Commission) for approval. Regretfully, the Company is yet to obtain the approval of NAICOM, hence the delay.”

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Note that the last earnings report by African Alliance was its unaudited Q4 2019 financial statements. The report showed that gross premium income for the period stood at N8.7 billion as against N6.8 billion during the comparable period in 2018. There was also a N6.5 billion loss for the period, compared to the N2.9 billion loss recorded in 2018.

African Alliance share price on the Nigerian Stock Exchange is currently N0.20. Year to date, the share price has remained unchanged.

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Appointments

Lamido Yuguda assumes duty as new DG of SEC

Yuguda says his management promises no respite for anyone who defrauds investors. 

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Lamido Yuguda assumes duty as new DG of Security and Exchange Commission

Mr. Lamido Yuguda, the new Director-General of the Securities and Exchange Commission (SEC), has started work at the capital markets regulatory agency. He assumed duty alongside three new SEC commissioners, namely – Mr Reginald Karawusa, Ibrahim Boyi, and Dayo Obisan.

Mr Yuguda announced that the SEC’s capital market master plan of 2014 will enable Nigeria’s capital markets to accelerate the development of the country’s economy. He added that the SEC in the past 20 years has worked with industry stakeholders to implement initiatives that have improved the regulation and development of Nigeria’s capital markets.

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“Many of the initiatives have been successfully implemented while many others are work in progress in line with its objectives. Therefore, the continued implementation of the plan will be one of the major focus of the incoming management, while we also seek possible ways of strengthening it for enhanced impact. We would equally work towards improved market regulation, surveillance and general development,” Yuguda said.

He added that the SEC would make investor protection the focus of the initiatives that will be implemented by the new management. Assuring the public that the new management would do its best to improve capital market regulation for the benefit of all stakeholders and warned defaulting operators would be punished.

READ MORE: Why Nigerians, NCDC DG are opposed to the new NCDC bill

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“We want to assure investors that this market is for them and we are ready to do everything to ensure that we increase investor enlightenment through education, robust regulation and fair dealing. For those that want to defraud investors, there would be no respite,” he added.

The outgoing Acting Director-General, Ms Mary Uduk said she was confident in the new management would improve on the achievement the SEC has built so far. Adding that the SEC has introduced reforms in the past few years that have led to regulatory milestones.

Mr. Lamido Yuguda is a holder of the CFA Charter and a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), with a B.Sc. degree in Accounting from Ahmadu Bello University, Zaria and an M.Sc. in Money, Banking and Finance from the University of Birmingham.

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He is holds a Certificate in Financial Asset Management and Engineering from the Swiss Finance Institute, Geneva and a Certificate in Investment Performance Management from the CFA Institute, Charlottesville, Virginia, USA. 

 

 

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