The Central Bank of Nigeria and the bankers’ committee have agreed to back a N3.5 trillion stimulus package for the Nigerian economy. According to an excerpt from a communique seen by Nairametrics, the Bankers’ Committee also gave its full support to the policy measures amounting to over N3.5 Trillion earlier announced by the CBN in response to the economic impact of the COVID-19 on Nigeria.
The CBN had during the week disclosed that it would support critical sectors of the economy with N1.1 trillion intervention fund. This was stated by the Godwin Emefiele, Governor of the apex bank on Wednesday in a statement.
In the statement, Emefiele explained that out of the N1.1trillion, about N1trillion would be used to support the local manufacturing sector as well as boost import substitution. He added that the balance of N100 billion would be used to support the Health Authorities to ensure laboratories, researchers and innovators work with global scientists to patent and produce vaccines and test kits in Nigeria.
However, following the bankers’ committee meeting on Saturday, it appears the Nigerian economy will be receiving an economic stimulus of about N3.5 trillion. The communique did not explain how the funds will be disbursed but pledged to grant funding facilities (in Naira and foreign exchange) to pharmaceutical companies in the country to enable them to procure raw materials and equipment to boost local drug production in Nigeria.
Where is N1.5 trillion from? The CBN did not reveal where it plans to get the N3.5 trillion it plans to inject into the economy as a stimulus. However, it did mention that the N1.1 trillion will be disbursed as intervention funds. Past intervention funds have been issued from the central bank’s balance sheet as part of its developmental programs. This could sometimes involve some of quantitative easing, an economic term for printing of money.
It appears the balance N2.4 trillion might have to come from commercial banks in the form of loans to small businesses and the manufacturing sector.
This is a developing story….
United Capital Plc raises N10billion in Series 1 Bond Issuance
The bond issuance adds to itsbimpressive portfolio of innovative and landmark transactions it has structured, and it once again highlights its capabilities in the successful execution of novel debt capital market transactions.
United Capital Plc, has raised N10 billion in its Series 1 Bond issuance under a N50 billion Medium-Term Debt Programme registered with the Securities & Exchange Commission (SEC).
The capital raise places the company as the first Issuing House to issue a Corporate Bond in the history of the Nigerian Capital market.
The company’s Group CEO, Peter Ashade, explained that this action, being a first for any investment bank in the history of the Nigerian Capital market, strengthens United Capital’s track record as a force to reckon with in the investment banking terrain.
He said, “With an oversubscription of 24% investor, we believe this milestone accentuates the confidence in our Institution, and its ability to diversify our corporate funding sources, provide innovative financial solutions and our unwavering commitment to our esteemed clients.”
In line with the company’s goals for the year 2020, it served as a book runner on the deal, advising on the transaction structure, securing relevant regulatory approvals, and implementing a marketing strategy for the bonds. Its role also included making a compelling business case for the issuance, amongst others.
Babatunde Obaniyi, Managing Director, Investment Banking, said, “the bond issuance adds to the impressive portfolio of innovative and landmark transactions we have structured, and it once again highlights our capabilities in the successful execution of novel debt capital market transactions.”
The transaction having a tenor of 5 years, scored a 124% subscription, “with huge commitments from a diversified institutional investors’ base including Pension Fund Administrators and other players in the financial service space.”
He also explained how the strong outcome of the transaction re-affirms the confidence of its buy-side investors’ as well as its leadership in the financial services landscape.
Fines: NSE makes over N154 million from banks, others
About 30 firms were fined for unauthorised publications, non-disclosure of material information, failure to file their financial statements by the due date.
The Nigerian Stock Exchange (NSE) boosted its revenue with N150 million from fines imposed on listed companies across the banking, manufacturing, and insurance sectors, among others, between 2018 and the first quarter of 2020. This is contained in the X-compliance report obtained by Nairametrics from the Stock Exchange.
The report disclosed that five firms were fined over N6.1 million for unauthorised publication of notice of board meetings, annual general meetings, and a notice of resignation of four directors.
About 25 other firms were asked to pay about N148 million fine for non-disclosure of material information, and failure to file their financial statements by the due date.
Why it matters: Every listed company is required to provide the Exchange with timely information to enable it efficiently perform its function of maintaining an orderly market.
In accordance with the provisions of Appendix III: General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules) and The Exchange’s Circular No. NSE/LARD/LRD/CIR3/17/05/12 on Publication of Announcements or Press Releases via The Issuers’ Portal, listed companies are required to obtain prior written approval from the Exchange before publications that affect shareholders’ interests are made in the media or via the Issuers’ Portal.
Details: For unauthorised publication, Access Bank Plc, Diamond Bank Plc, Prestige Assurance Plc, and First Aluminium Nigeria Plc were fined N2.205 million, N3.087 million, N496,125 and N476,280, respectively.
For non-disclosure of material information, Access Bank Plc, Diamond Bank Plc, and First Aluminium Nigeria Plc were fined N4.410 million, N3.234 million, and N476,280, respectively. Access Bank and the defunct Diamond Bank were penalised for non-disclosure of resolutions passed at their board meetings, while First Aluminium was penalised for non-dispatch of the notice of its annual general meeting and annual reports to shareholders 21 days before the date of the meeting.
Failure to file financial statements: Anino International, Deap Capital Management, Grief Nigeria Plc, Union Bank Nigeria Plc, Afromedia Plc, Conoil Plc, Lasaco Assurance Plc, Flour Mills of Nigeria Plc, Universal Insurance Plc, Thomas Wyatt Nigeria Plc, and others were fined. In this category, Anino International got the highest fine of N41.1 million as it failed to file its financial statements since 2015.
R.T Briscoe was fined N31.3 million for the delay in filing its 2018 audited financial statement, first and second quarter of 2019 financial statements.
Niger Insurance and Guinea Insurance were fined N19.8 million and N19.2 million, respectively, for failing to file their full-year 2018, first quarter 2019 and second quarter 2019 financial statements as at when due.
Royal Exchange, Thomas Wyatt and Lasaco Assurance were respectively fined N8.9 million, N4.9 million and N1.4 million, for failing to file their audited 2018 and first quarter 2019 financial statements, while Universal Insurance got a fine of N5 million for failing to audit 2018, first and second quarter 2019 financial statements.
NSE slammed N800,000, N200,000, N400,000 and N400,000 fines on Grief Nigeria, Union Bank, Afromedia and Conoil for the delay in filing their 2018 financial statements.
Flour Mills of Nigeria, Access Bank and Interlinked Technologies received respective penalties of N1.2 million, N700,000 and N200,000 for failing to file financial statements for the first quarter, second quarter and second quarter of 2019 respectively.
Meanwhile, some shareholders of the companies, who spoke with our analyst in separate interviews, praised the management of the Stock Exchange for being strict on its compliance exercise, as they called for the punishment of erring companies.
MTN Nigeria Communications Plc announces N100 billion commercial paper issuance
MTN Nigeria notified the public of it proposed Commercial Paper Issuance under its N100 billion Commercial Paper (“CP”) Issuance Programme.
MTN Nigeria Communications Plc has notified the public of it’s proposed Commercial Paper Issuance (series 1 & 2 commercial paper issuance N50billion each) under its N100 billion Commercial Paper (“CP”) Issuance Programme.
The proceeds from the CP issuance will be used to support MTN Nigeria’s working capital and general corporate purposes. This issuance under the CP Programme represents MTN Nigeria’s debut in the domestic debt capital market.
Highlights of the report are as follows:
Arranger: Chapel Hill Denham Advisory Limited
Minimum subscription: N5 million
Issuance size: N100 billion (series 1 & 2 commercial paper issuance N50billion each)
Tax consideration: Free and clear of withholding Taxes
MTNN is the leading telecommunications operator in the largest telecoms market in Africa. The company is the largest mobile operator and undisputed market leader in Nigeria, as measured by total mobile subscribers (c. 70 million), active data users (c. 26.8 million), revenue (almost 50% of industry), and profit pool.
MTNN is well-positioned for the long term, with its unmatched investments in its infrastructure – most expansive 2G, 3G, and 4G network, largest fibre network (c. 29,000km) that spans across Nigeria, largest physical and digital distribution platform, and wide range of spectrum holdings – and the exciting market opportunity Nigeria brings.
Nigeria offers an attractive telco market proposition as Africa’s largest economy and most populous country. Mobile voice and data subscription will continue to be a major part of consumer spending, largely driven by increased adoption by the young population.
It is important to note that in the recent COVID-19 environment, MTNN has continued to sustainably add new subscribers, and customer voice and data usage remains resilient.
MTNN is rated Aa+ by Agusto & Co. which reflects the company’s history of strong financial performance – record revenue in excess of N1 trillion (largest revs by a listed corporate), stable and healthy operating profit metrics (+53% EBITDA margin), comfortably low leverage (0.4x Net Debt/EBITDA, 10.8x interest coverage) that is predominantly local currency, and strong free cash flow.