Business News
Why you need to buy C&I Leasing Right issue
C&I Leasing Plc has launched its plans to raise N3.2 billion in capital through the issuing of rights issue to increase its investment in the marine business. #C&ILEASING
C&I Leasing Plc, a leading leasing and ancillary services conglomerate, has disclosed that the proceeds of its on-going N3.2billion Right Offer would be used to increase its investment in the marine business.
Managing Director and Chief Executive Officer (MD/CEO), Andrew Otike-Odibi, explained that the offer, which is 539,003,333 ordinary shares of 50 kobo each at N6.00 per share on the basis of four (4) new ordinary shares for every three (3) held, is being undertaken as part of the long-term plan to strategically position the company for sustainable growth.
He added that it is tradable and therefore open to non-existing shareholders, who are willing to buy shares in the company.
[READ ALSO: Consolidated Hallmark to raise N4.5 billion through rights issue (Opens in a new browser tab)]
Why it matters: A comparison of the current market price of C&I Leasing, which stood at N7.3 on Sept 12th 2019, and the offer price of N6 for the rights, shows that the rights are being issued at a discount of N1.73.
Not only is the C&I Leasing rights presenting a better offer in terms of pricing, it is also rewarding in terms of the number of shares that existing shareholders are getting.
Subscribing to the C&I Leasing rights offer will entail that a shareholder will be paying N24 for 4 additional shares that are worth N29.2 in the market, which is a gain of N1.3 per share. It means the C&I Leasing rights offer makes more economic sense.
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Going by the facts behind the offer, investors are advised to buy the C&I Leasing shares at N6, which they can profitably sell at the market for more than that, possibly at N7.3 or more.
Otike-Odibi said, “The rights issue is the first step into our medium to long term capital restructuring plan. This will give our existing shareholders some advantage in terms of shareholding and the value of the shares.
“If we’re going to do a public offer, we probably would do it at a premium above what we are currently coming to the market with and also it will be open to external investors who have not been in the business for some time, so this is like the second step in the journey because we did a bond issuance last year which was successful and now we’re doing an equity raise through a rights issue.”
Meanwhile, the capital raised from the rights issue would be used to refinance some of the company’s debts while the rest would be used for expansion into the marine business as the company seeks to invest heavily in this sector.
[READ MORE: NPF Microfinance vs C&I Leasing: A tale of two rights offer)
“Part of the proceeds from the rights issue will be to refinance some of our debts and the rest of it will be for business expansion. We’ve invested heavily in the marine business and will continue in these investments because of the opportunities in that area so part of that money will go into growth in the marine business where we will buy new vessels,” Andrew Otike-Odibi said.
Meanwhile, the capital raised from the right issue would be used to refinance some of the company’s debts and the rest used for expansion into the marine business as the company seeks to invest heavily in this sector.
“Part of the proceeds from the rights issue will be to refinance some of our debts and the rest of it will be for business expansion. We’ve invested heavily in the marine business and will continue in these investments because of the opportunities in that area so part of that money will go into growth in the marine business where we will buy new vessels.
“C&I Leasing is committed to the well-being of its shareholders and stakeholders in general and is intentional about prioritizing their interests. The offer opened on Monday 18th of November 2019 and will close on Friday 27th of December 2019,” Andrew Otike-Odibi said.
About C&I Leasing
C & I Leasing Plc is listed on the Nigerian Stock Exchange and engages in the business of fleet management, auto distribution, and marine rental/leasing. The company also offers escort services, fire-fighting services, pollution control services, mooring support services, recruitment/HR consultancy services, among others. It was incorporated in December 1990 and listed on the NSE in December 1997.
Commodities
Five oil majors reduce value of their assets by $50 billion in Q2
Energy demand at one point was down by more than 30% globally.
Five oil majors (including Exxon Mobil and British Petroleum) reduced the value of their assets by $50 billion in Q2, 2020. They also reduced their production rates as the COVID-19 pandemic caused a downward trend in energy demand.
What this means: The cut in asset valuations and reduction in crude oil production by these oil majors showed the depth of damage the COVID-19 pandemic caused on the global energy sector in Q2, 2020.
Energy demand at one point was down by more than 30% globally and still remains below pre-pandemic levels.
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Some of these conpanies’ executives said they took these austerity measures because they expect demand to continue to be on the downward trend in the meantime. This is in view of the fact that people around the world are traveling less, even as many global industries are not in full capacity. The pandemic has already killed more than 700,000 people.
Of those five oil majors, only Exxon Mobil (XOM.N) did not book sizeable impairments, Reuters reported. However, an ongoing re-evaluation of Exxon Mobil plans could lead to a reasonable amount of its assets being impaired, and signal the removal of 20% or 4.4 billion barrels of its oil and gas reserves.
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Oil major BP (BP.L) took a $17 billion hot. It said its plans in the coming years would be a focus on renewables and fewer fossils.
About two weeks ago, Nairametrics reported how Exxon Mobil and Chevron posted their worst losses in modern history, as the COVID-19 pandemic and a glut in crude oil reduced the demand for energy products in the second quarter of 2020.
Hospitality & Travel
US gives reasons it warned citizens against travelling to Nigeria, lists 12 high risk states
The US government has issued a level 3 Travel Health Notice for Nigeria due to COVID-19.
The United State Government has advised its citizens against travelling to Nigeria due to the Coronavirus pandemic, terrorism, civil unrest, kidnapping, widespread inter-communal violence, and others.
This warning is contained in a travel advisory statement that was obtained from the United State Department of State website.
The statement also disclosed that the Centre for Disease Control and Prevention (CDC) had issued a level 3 Travel Health Notice for Nigeria due to the Coronavirus pandemic. Also, some parts of the country have increased risk.
“Reconsider travel to Nigeria due to Covid-19. Reconsider travel to Nigeria due to crime, terrorism, civil unrest, kidnapping and maritime crime. Some areas have increased risk.’
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‘’Do not travel to; Borno and Yobe States and Northern Adamawa State due to terrorism; Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States due to kidnapping; Coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt) due to crime, civil unrest, kidnapping and maritime crime,’’ the statement said.
It stated that violent crimes such as armed robbery, assault, carjacking, kidnapping, and rape, have become common throughout the country. As such, US citizens were advised to exercise extreme caution throughout the country due to the threat of indiscriminate violence.
“Terrorists continue plotting and carrying out attacks in Nigeria, especially in the Northeast. Terrorists may attack with little or no warning, targeting shopping centres, malls, markets, hotels, places of worship, restaurants, bars, schools, government installations, transportation hubs, and other places where crowds gather.
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“Sporadic violence occurs between communities of farmers and herders in rural areas.’’
The US government acknowledged the fact that it has limited ability to provide emergency services to US citizens in many parts of Nigeria due to the security conditions.
Going further it stated, “Do not travel to Borno and Yobe States and Nothern Adamawa. Terrorist groups based in the Northeast target churches, schools, mosques, government installations, educational institutions and entertainment venues. Approximately two million Nigerians have been displaced as a result of the violence in Northeast Nigeria.
“Do not travel to Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States. The security situation in Northwest and Northeast Nigeria is fluid and unpredictable, particularly in the states listed above due to widespread inter-communal violence and kidnapping.
“Do not travel to the coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt). Crime is rampant throughout Southern Nigeria, and there is a heightened risk of kidnapping and maritime crime, along with violent civil unrest and attacks against expatriate oil workers and facilities.’’
Energy
World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits
Saudi Aramco is the national energy company of Saudi Arabia.
The world’s largest oil company, Saudi Aramco reported a 73% drop in profit Q2,2020 profit and still kept its plans to pay $75 billion in annual dividends in a report credited to Bloomberg News
Saudi Aramco reported a plunge in profits for Q2,2020 of 24.6 billion riyals compared to 92.6 billion riyals recorded in the same corresponding year.
Aramco will pay a Q2,2020 dividend of $18.75 billion, most of it to the government of Saudi Arabia, the company’s major shareholder.
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The plunge in profit was due mainly to “the impact of lower crude oil prices and declining refining and chemical margins,” Aramco said in the statement to the Saudi stock exchange.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second-quarter results,” said Chief Executive Officer Amin Nasser.
“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”
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Quick fact; Saudi Aramco is the national energy company of Saudi Arabia. It produces five grades of crude oil and natural gas liquids.
It also produces refined energy products that include liquefied petroleum gas, ethanol, naphtha, and other products.
It exports about 75% of its crude oil to foreign markets, most often with its oil tankers. Saudi Aramco has access to crude oil reserves of about 260 billion barrels, the largest in the world.
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OPEC’s largest oil exporter, Saudi Arabia has been hit hard by global economic restrictions aimed at curbing the spread of COVID-19.
The Saudis make most of its revenue from crude oil, which has dropped 33% in value this year.
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