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Corporate deals

AIICO seeks NSE’s approval for conducting Rights Issue

Company’s shareholders now have the opportunity to increase their stake and position themselves for higher returns.

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AIICO seeks NSE’s approval for conducting Rights Issue

AIICO has kicked off another phase in its recapitalization strategy and submitted its application to the Nigerian Stock Exchange (NSE).

The application was to seek the approval and listing of 4,357,770,954 ordinary shares of Fifty Kobo (N0.50) each at Eighty Kobo (N0.80) per share, on the basis of five (5) new ordinary shares for every thirteen (13) ordinary shares held.

What it means: The Company’s shareholders now have the opportunity to increase their stake and position themselves for higher returns in a Company with excellent prospects.

AIICO’s recapitalization journey started in earnest when the insurance regulator, the National Insurance Commission (NAICOM) set a strategic plan to increase the capacity of the industry to take on more risks.

READ MORE: NSE, IFC Highlight Gender Implications of COVID-19 in Inaugural Seminar Under the Nigeria2Equal Program

Responding to this, AIICO quickly articulated a clear path to meet the new minimum regulatory capital requirement. The Company followed through with regular communications at all stages in the execution of the strategy with its shareholders, who have been supportive of the efforts.

In February 2020, the Company completed its private placement successfully with 38.83% of its shares snapped up by two strategic investors; LeapFrog Nigeria Insurance Holdings Limited (28.24%) and AIICO Bahamas Nigeria Limited (10.59%), raising the share capital from N6.1bn to N11.3bn.

The Rights Issue is expected to generate N3.5billion, bringing the Company closer to meeting the required minimum paid-up capital of N18 billion. The exercise will be followed subsequently with a capitalisation (bonus) issue, which has a qualification date of 23 September 2020.

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The industry, as with others, is facing daunting challenges as a result of the pandemic. As a result, NAICOM recently revised its recapitalization guidelines; 50% of the new minimum capital to be achieved by December 31, 2020, while the deadline for overall completion has been extended till September 30, 2021.

READ MORE: Minimum Wage: FG discloses reasons for delayed implementation

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AIICO has however maintained an unbroken focus on its journey to its recapitalization. The Company also provided updates on the convertible loan instrument with the International Finance Corporation (IFC).

It obtained a loan of US$7million from the IFC on June 30, 2015, at an interest rate of 6.5% plus 6-month LIBOR for seven years with a moratorium period of 4 years on the principal.

The loan had an embedded derivative (a conversion option) whereby IFC had the right to convert all or a portion of the outstanding principal amount into the equivalent number of shares of the Company.

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The loan repayment is in six (6) equal installments starting in March 2020 and is expected to end in September 2022 except if prepaid before then.

This convertible option, however, expired in December 2019 without the IFC exercising its option. Hence, the loan is now a straight loan without a conversion option till maturity.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Corporate deals

DEAL: Shyft Power Solutions raises $3.1m Seed Round to push affordable energy

The funding round was led by the SoftBank Vision Fund’s Emerge Program and Total Carbon Neutrality Ventures with participation from other investors.

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SHYFT Power Solutions, which builds IoT and software to optimize distributed energy resource performance and operational efficiency in emerging markets, has announced an additional $3.1M in funding to bring its total seed round to $3.8M.

The funding round was led by the SoftBank Vision Fund’s Emerge Program and Total Carbon Neutrality Ventures with participation from other investors including Lofty Inc, Samurai Ventures, and Urban US Ventures.

SHYFT was founded by Stanford’s engineers to address the challenges in delivering and scaling clean, reliable, and affordable energy solutions in emerging markets that struggle with unreliable grids or energy access. SHYFT’s initial focus is in Nigeria, a country set to be the 3rd most populous after China and India, but were an unreliable grid has led to widespread dependence on generators, accounting for nearly 8x the capacity of the grid.

READ: Top 10 Nigerian tech companies and capital raised in 2020

SHYFT is pioneering the digitization of the energy landscape in emerging markets like Nigeria. Its asset management solution delivers an integrated approach that uses algorithms to monitor, automate, and optimize how assets, as well as grid connections, are utilized individually and as an integrated system, aggregating a plurality of data streams while doing so.

By increasing visibility and control, the system helps users to make informed decisions about which sources they use, how long they use a source, and when they switch sources. This enables operators to scale distributed systems in a cost-effective way, particularly in remote markets. It has resulted in operators improving RoI, reducing emissions, mitigating downtime, and reducing operational costs, in some cases by up to 57%.

SoftBank Vision Fund’s Emerge Program was established in 2019 to provide select startups with access to the tools, networks, and support to take their business to the next level. Total Carbon Neutrality Ventures is focused on finding, funding, and fostering high-potential startups which will contribute to creating a low carbon future.

READ: S&P 500 sets record highs on the back of tech stocks

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SHYFT plans to use this new funding round to double its team in West Africa over the next year with a focus on developing AI capabilities to use its data and algorithms for system optimization. The company will also look to build corporate partnerships and expand to additional African markets facing similar energy challenges.

SHYFT’s customers and strategic partners include some of the largest and fastest-growing alternative energy companies in Nigeria, including Daystar Power Solutions and Aspire Power Solutions. After passing critical IEC safety testing for their controllers, the company began ramping up sales across Nigeria over the past year with their customers. Today, they have over 2,000 kW of assets being managed by SHYFT technology and expect that to increase ten-fold by the end of 2021. Nearly every major bank in Nigeria has a branch using SHYFT technology, creating a path for SHYFT and its customers to deliver reliable power to the nearly 5,000 branches in the market.

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What they are saying

Ademidun Edosomwan, Managing Director, Emerging Markets at Total Carbon Neutrality Ventures (TCNV), said: “Energy is an essential need for all, yet it is estimated that more than 3.5 billion people globally lack access to affordable and reliable electricity. SHYFT’s technology will play a critical role in a global movement to democratize the way people manage their power sources. They’ve developed data-driven software that enables homeowners and businesses in emerging markets to make smarter decisions on their energy use in order to cut costs and reduce emissions. We are delighted to support SHYFT’s momentum as Ugwem and the team continues to expand their impact and help build a better energy future for the world.”

Ugwem Eneyo, Co-Founder & CEO SHYFT said. “I founded SHYFT to build the technology that can enable and accelerate this transition, and ensure that on the path to reliable energy access, the use of cleaner solutions can mitigate carbon emissions as well. We are fortunate to have investors supporting us where their sector and global experience will be invaluable.”

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Corporate deals

DEAL: Nigerian fintech software provider, Appzone raises $10m to scale its products and services

Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa.

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Appzone a fintech software provider that builds proprietary solutions for financial institutions and their banking and payments services announced that it has closed $10 million in Series A investment.

The Series A round was led by CardinalStone Capital Advisers, a Lagos-based investment firm. Other investors include V8 Capital, Constant Capital, and Itanna Capital Ventures. New York-based but Africa-focused firm Lateral Investment Partners also participated.

Founded in 2008 by Emeka Emetarom, Obi Emetarom, and Wale Onawunmi, Appzone functions as an enabler (at payment rails and the core infrastructure) within banking and payments.

READ: Shola Akinlade: The inspiration behind Paystack’s success

Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa. Together, they amass a yearly transaction value and yearly loan disbursement of $2 billion and $300million.

Before now, Appzone closed a $2 million deal from South African Business Connexion (BCX) in 2014. Four years later, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. But overall, the company says it has raised $15 million in equity funding.

This new funding will be used to scale its products and services and expand across more African countries. The startup also plans to achieve scale by growing its engineering team.

READ: From Chemist to Bank CEO – The Story of Uzoma Dozie

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What they are saying

Yomi Jemibewon, the Co-Founder and Managing Director of Cardinal Stone Capital Advisers, said the firm’s investment in Appzone is further proof of Africa’s potential as the future hub of world-class technology.

READ: Bill Gates holds far more cash than Nigeria’s foreign reserve

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Appzone is building a disruptive fintech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure, and software as a service. The impact of Appzone’s work is multifold — the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best-in-class employment opportunities.”

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