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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

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C&I Leasing launches N3.2bn Rights Issue, plans increased investment in marine business

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.

[READ ALSO: What UACN decision to un-bundle UPDC means for its shareholders(Opens in a new browser tab)]

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.”

C&I Leasing gets approval to list N539 million worth rights issue, C & I Leasing Plc sets ambitious revenue target for 2023

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.

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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.

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Economy & Politics

Top States in Nigeria with highest IGR per population in 2020

Nairametrics ranks the 36 states of the Federation, including the Federal Capital Territory, based on their IGR per population.

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Nigeria’s states generated a sum of N1.31 trillion internally in 2020, representing a marginal decline compared to N1.33 trillion recorded in 2019, and an increase compared to N1.17 trillion in 2018.  

The downturn is attributable to reduced state revenue as a result of disruptions caused by the covid-induced lockdown, while the crash in crude oil prices also hampered economic growth. 

Internally generated revenue is regarded as income generated by various states in the country, independent of their share of revenue from the Federation account. However, apart from the clear exception of Lagos State, all others depend largely on statutory allocations to run their state affairs. 

Nairametrics ranks the 36 states of the Federation, including the Federal Capital Territory, based on their IGR per population, taking into account the estimated population size of each state as at 2016 and 5% growth rate between 2016 and 2020.  

Geo-political zones 

In terms of IGR per population for the six geo-political zones in Nigeria, South West takes the lead with an average of N13,966, having generated a sum of N561.01 billion and an estimated population of 40.17 million people. The South-South region followed with an average of N8,694 and a total aggregate IGR of N263.17 billion.  

On the flip side, the North-Eastern region, which houses states like Bauchi, Borno, Yobe, etc. recorded the lowest IGR per population of N2,061 closely followed by North West with an average of N2,855. 

Here are the top 5 states with the highest IGR per population in 2020. 

Lagos State – N31,794 

Lagos State, regarded as the economic hub of the nation, with a total estimated population of 13.18 million people as of 2020generated a sum of N418.99 billion as IGR in 2020. This represents an increase of 5.1% compared to N398.73 billion recorded in 2019. 

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  • In terms of IGR per capita, Lagos State generated an average of N31,794 from each member of the population in 2020, as against N30,257 generated in the previous year. 
  • It is no surprise that Lagos State tops the rank, being a major epicentre for economic activities in the country. Lagos State is the largest city in Africa in terms of GDP, and the State is widely known for its large industries, with most corporations in the country headquartered within the state. 
  • It also houses major seaports in the country as well as the State Government’s aggressive taxation policies. These, amongst others, ensure the state makes more revenue internally compared to other states of the Federation. 
  • According to data obtained from the National Bureau of Statistics, Lagos State received a total of N115.93 billion as Federal allocation in the year 2020, representing 21.67% of the total revenue available to the state in the year. 
  • This shows the exceptional ability of the state to run its affairs, using its internally generated revenue with little or no support from the Federal purse. 

Abuja – N24,600 

The Federal Capital Territory generated a sum of N92.06 billion in 2020, the third-highest state IGR in the year. However, based on IGR per population Abuja seats in second position with an average of N24,600. 

  • This represents a 23.5% increase when compared to N19,925 recorded in 2019. 
  • Abuja is the capital territory of Nigeria, with a total estimated population of 3.74 million people across a 7,315km square area. 
  • The state houses a lot of Federal ministries, having been made the country’s capital in 1991. Abuja is also a major conference centre in the country, as it hosts various meetings and summits annually. 
  • A cursory look at the data showed that the state’s IGR only accounted for 57.85% of the total available revenue, indicating that 42.15% of its revenue was gotten from the Federation account. 

Rivers State – N15,281 

Rivers State, being a major oil-producing state in the country, generated a sum of N117.19 billion as internally generated revenue in 2020. 

  • However, with an estimated population of 7.7 million people, its IGR per population stood at N15,281 in 2020, representing a decline of 16.5% when compared to N18,307 recorded in 2019. 
  • Rivers State is in the Niger Delta region of the country with much of the businesses in the state being oil exploration companies. 
  • Evident from the data obtained from the NBS, Rivers State relies heavily on statutory allocations from the Federal Government as well as their share of the 13% oil derivatives as it received a total of N141.19 billion from FAAC, representing 54.64% of the total available revenue in the review period. 

Delta State – N10,045 

Delta state, another state in the Niger Delta region of the country, with an estimated population of 5.9 million, generated a sum of N59.73 billion as IGR, and an average of N10,045 as IGR per population. 

  • Delta State is a major oil-producing state and ranks second to Rivers State. The State supplies about 35% of Nigeria’s crude oil and some considerable amount of natural gas. 
  • Delta State in the period received a sum of N186.83 billion as statutory allocation. 
  • Its IGR only accounted for 24.2% of the available revenue in the period, while N46.11 billion was generated as PAYE. 

Ogun State – N9,263 

Ogun State, a neighbouring State of Lagos State, generated a sum of N50.75 billion. In terms of IGR per population, the State generated a sum of N9,263. 

  • The State’s average income per population decreased by 28.4% compared to N12,945 recorded in 2019. 
  •  The State is strategically located, bordered to the East by Ondo State, to the North by Oyo and Osun States, to the South by Lagos State and the Atlantic Ocean, and to the West by the Republic of Benin. 
  • Ogun State also joins the list of states that are much dependent on FAAC allocations as statutory payments stood at N37.7 billion, representing 42.61% of the total revenue. 

Bottom five 

Katsina – N1,386 

Jigawa – N1,416 

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Benue – N1,736 

Niger – N1,804 

Bauchi – N1,821 

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Business News

SpaceX says it’s pursuing necessary licenses to bring Starlink to Nigeria

Broadband penetration of 70% which covers 90% of the population is the FG’s target in its National Broadband Plan (NNBP), 2020-2025.

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Telecoms sector remains resilient as broadband subscriptions climb

American private space exploration company founded by Elon Musk, SpaceX says it is working to pursue all necessary licenses needed to bring the Starlink Satellite internet services to Nigeria.

This was disclosed by Mr Ryan Goodnight, SpaceX’s Starlink Market Access Director for Africa in a meeting with NCC’s Executive Vice-Chairman (EVC), Prof. Umar Danbatta on Friday in Abuja.

What SpaceX is saying about Starlink in Nigeria

“SpaceX has been in discussion with NCC virtually over the past several months to begin the process of pursuing all necessary licences to bring Starlink, its satellite-based broadband services, to Nigeria.

Having made substantial progress in the discussion, the commission granted SpaceX’s request for a face-to-face discussion to gain better insights on the prospects,” they said.

The NCC stated that it has listened to SpaceX’s presentation and will review it vis-à-vis its regulatory direction of ensuring an effective and sustainable telecoms ecosystem where a licensee’s operational model does not dampen healthy competition among other licensees.

“As the regulator of a highly dynamic sector in Nigeria, the commission is conscious of the need to ensure that our regulatory actions are anchored on national interest,” they said.

NCC added that broadband penetration of 70% which covers 90% of the population is the FG’s target in its National Broadband Plan (NNBP), 2020-2025. This is also in line with its National Digital Economy Policy and Strategy (NDEPS), 2010-2030.

What you should know

Starlink is an internet service launched by SpaceX to improve internet coverage in rural and underserved areas globally. Starlink satellites are over 60 times closer to Earth than traditional satellites, resulting in lower latency and the ability to support services typically not possible with traditional satellite internet.

Nairametrics also reported this month that the  Federal Government announced a deal with Microsoft through the Federal Ministry of Communications and Digital Economy for the development of high-speed internet infrastructure across the six regions in the country.

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