Corporate deals
IFC invests $100 million in Zenith Bank to support SMEs amid COVID-19
The loan is IFC’s first in Africa under its global COVID-19 fast-track financing support package.
International Finance Corporation (IFC), a member of the World Bank Group, today announced an investment of up to $100 million in Nigeria’s Zenith Bank Plc to help it increase support to clients and companies whose cash flows have been disrupted by challenges caused by the COVID-19 pandemic.
IFC’s loan to Zenith Bank is its first investment in Africa through its COVID-19 fast-track financing support package. The funding will help Zenith, an existing IFC client and Africa’s sixth-largest bank, to overcome challenges resulting from ongoing limited access to foreign currency, working capital, and trade funding.
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Zenith will support dozens of businesses in Nigeria’s health, pharmaceuticals, food, and trading sectors, allowing them to strengthen operations, maintain employment, and access critical imports of goods, commodities, and raw materials during these challenging economic times.
Ebenezer Onyeagwu, the Group Managing Director/CEO of Zenith Bank, said the “IFC’s support is essential and will help us respond to challenges resulting from the COVID-19 pandemic. It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors. Our partnership with IFC is strong and we are committed to its environmental, social, and governance (ESG) requirements.”
IFC’s loan to Zenith is part of its $8 billion global fast-track financing package, announced in March to support business activity and preserve jobs in the face of COVID-19. Close to 300 clients have requested support globally.
The closure of borders, shutting of businesses, and reduced global trade-related to COVID-19 are affecting Nigeria’s economy and others across Africa, with the World Bank predicting Africa’s first recession in 25 years.
Eme Essien Lore, IFC’s Country Manager in Nigeria, said, “IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from COVID-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage.”
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Zenith Bank has more than 400 branches in Nigeria and serves over 9 million corporate and individual clients within its global footprint. IFC’s overall portfolio in Nigeria stands at $1.3 billion, in sectors including manufacturing, financial services, infrastructure, and technology.
Corporate deals
Ekiti State secures UN and SHS Holdings partnerships to invest $2 billion to build 50,000 homes
The UN Office for Project Services and SHS will mobilize 3rd party investors to fund the initiative.
The government of Ekiti State has announced it has partnered with the United Nations Office for Project Services (UNOPS) and the Sustainable Housing Solutions (SHS) Holdings to build 50,000 homes with renewable energy from 2020-2030 in Ekiti State.
The programme is part of the UNOPS Sustainable Infrastructure Impact Investment (S3I) initiative. “The agreement will help address the housing shortages in Ekiti State with a focus on sustainability and local economic development,” The UN said.
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BREAKING: The Government of Ekiti State has secured a partnership with @UNOPS and @SHS Holdings to invest up to $2 billion to build 50,000 affordable homes with renewable energy from 2020-2030 in Ekiti State.
Read more here: https://t.co/HtdnkhYYHV . #JKFatWork pic.twitter.com/RzhAvpgYYP
— Government of Ekiti State (@ekitistategov) July 1, 2020
Speaking on the initiative, Ekiti State Governor, Dr. Kayode Fayemi said, “We are very excited to partner with UNOPS and SHS to deliver affordable housing to the people of Ekiti.”
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“This is how our promise of developing Ekiti and improving the lives of the people can be achieved. This partnership has come at an important time, during the COVID-19 pandemic, which has reminded us of the need to deliver quality social infrastructure to the people,” he added.
UNOPS and SHS will mobilize 3rd party investors to fund the initiative which is valued to cost $2 billion.
The UNOPS S3I aims to build at least in million homes in multiple countries in 3 continents over the next decade.
Corporate deals
Actis-backed group acquires Nigerian university
The group owns private universities in Morocco, Tunisia, Mauritius, South Africa, Zambia, and Zimbabwe.
Honoris United Universities, an African education group backed by Actis, has acquired the Nile University in Abuja, its first University acquisition in Nigeria and the entire West African region.
We are thrilled to announce the addition of an incredible institution into the Honoris network. We'll be making the announcement tomorrow, so follow our feed to join us in welcoming them! #HonorisUni #EducationForImpact #NationBuilders #Education #PioneeringEducation pic.twitter.com/x2PgJtoNf5
— Honoris United Universities (@HonorisUni) July 1, 2020
The CEO, Luis Lopez announced that the deal was closed back in February before the COVID-19 pandemic spread across the continent.
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The group owns private universities in Morocco, Tunisia, Mauritius, South Africa, Zambia, and Zimbabwe. Now, it wants to add Nigeria to its portfolio.
In 2017, the private equity firm, Actis, set up a $275 million higher education platform for Africa through the Honoris United Universities initiative.
1,700 students have so far graduated from the insitution since it was founded in 2009 and it currently has 3,500 students with a tuition of $6,700 (N2.4 million).
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The CEO said it noticed a demand for high-quality education in Nigeria and plans on expanding its student base to 10,00 in six years.
Honoris will also expand its digital distance learning programmes with the aim of attracting students in Lagos and 2 other cities in northern Nigeria.
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Corporate deals
FCMB Pensions is planning to acquire AIICO Pension Managers Ltd
Recently, AIICO Insurance has been raising capital through various means. The sell-off could be one of them.
FCMB Pensions Ltd, a subsidiary of FCMB Group Plc, has commenced acquisition talks with the shareholders of AIICO Pension Managers Ltd.
The company wants to acquire 70% stakes in AIICO Pension Managers Ltd which is currently held by AIICO Insurance Plc, the parent company. An additional 26% stake in AIICO Pension (which is held by other shareholders) would also be acquired by FCMB Pensions Ltd, thereby bringing the proposed acquisition to 96% stake.
Separate statements made available to the Nigerian Stock Exchange by both FCMB Group Plc and AIICO Insurance Plc confirmed this development. But neither statement gave any reason for the proposed sale/acquisition.
FCMB Group did, however, explain that the proposed transaction is still subject to regulatory approvals, particularly approvals from the Federal Competition and Consumer Protection Commission as well as the National Pension Commission.
“FCMB Group Plc (FCMB Group) hereby notifies the Nigerian Stock Exchange (“NSE”) and the investing public that its pension management subsidiary, FCMB Pensions Limited (“FCMB Pensions”) has entered into discussions with shareholders of AIICO Pension Managers Limited (“AIICO Pensions”), to acquire the 70% stake held by AIICO Insurance Plc and 26% held by some other shareholders in AIICO Pensions. The proposed acquisition will make AIICO Pensions an indirect subsidiary of FCMB Group Plc,” FCMB Group said in its statement to the NSE.
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Meanwhile, part of the statement by AIICO Insurance Plc said:
“AIICO Insurance Plc (AIICO) hereby notifies the Nigerian Stock Exchange (“NSE”) that AIICO has entered into discussions with FCMB Pensions Limited (“FCMB Pensions”), for the sale of 70% stake in its Pension Management subsidiary, AIICO Pensions Managers Limited (“AIICO Pensions”) to FCMB Pensions Limited.
“The proposed sale is AIICO’s stake of 70% and other shareholders stakes of 26% thus bringing the cumulative sale of 96% stake to be purchased by FCMB Pensions. At the conclusion of the proposed sale, AIICO Pensions shall cease to be a subsidiary of AIICO Insurance Plc.”
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Recall that AIICO Insurance Plc has recently been raising capital through various means, mainly in a bid to meet the new recapitalisation requirement that was set by the National Insurance Commission, NAICOM. Two weeks ago, the company announced that it had sought the approval of the Nigerian Stock Exchange to list some 4.3 billion ordinary shares of N0.50 each. Perhaps, selling its subsidiary is part of the AIICO’s capital raise options.
In Q1 2020, AIICO Insurance grew its gross premium by 22.5% to N17.6 billion from N14.3 billion in Q1 2020. Profit after tax also grew by 82.8% to N1.9 billion during the quarter under review.
AIICO Insurance stock opened today’s trading on the Nigerian Stock Exchange at N0.97. Year to date, the share price has gained about 46%, up from N0.60 recorded in January this year.
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Yahaya Abdullahi Obaje
June 20, 2020 at 9:15 pm
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