Thread by @ugodre

Hello everyone, welcome to @Nairametrics Corporate News roundup for the week ended September 22, 2018. This thread is brought to you by @BluechipTechNG

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1.We begin with news of a surprise takeover of Skye Bank by the CBN. The CBN announced that it has revoked the license of the bank with immediate effect.

The apex bank claimed that it took this decision after “result of its examinations and forensic audit of the bank revealed that the bank required urgent recapitalization, as it could no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

Shareholders were, however, unable to recapitalize it.” The bank as you probably know already is now to be called Polaris Bank Ltd.

Now to the back story.

2. On July 4, 2016, the CBN dissolved the board of Skye Bank asking all the directors of the bank to resign. The CBN then appointed an interim board and claimed then that this was not a “takeover” of the bank.

The CBN then injected about N100 billion in the bank a few weeks later to help shore up its capital. This helped avoid a run on the bank allowing it to operate until its license was revoked on Friday.

Since then the CBN has been supporting the bank as the board it appointed struggled to raise capital. Reports indicate the CBN has injected over N700 billion so far.

Eventually, seeing that the rot in the bank was a huge snag to a potential acquisition, it decided to create a bridge bank, transferring the asset and liabilities of the bank to Polaris Bank.

3. It is interesting to note that just a year before it sacked the board of Skye Bank and injected the first N100 billion, the CBN had approved the sale of Mainstreet Bank (another bank nationalized by the CBN) to Skye Bank for about N126 billion.

The money was paid to AMCON whose largest shareholder is the CBN. From 2016 when Skye Bank was operating on life support from the CBN, it did not release any interim or audited results, yet its share price traded on the Nigerian Stock Exchange.

So, without results, CBN appointed board in control, what could the existing shareholders have done? However, the CBN explained that one of its reasons for revoking the license of the bank was because its shareholders had not been able to raise capital.

Another wild fact is that, as at close of business Friday, Skye Bank shares were up 54% YTD compared to the Nigerian Stock Exchange down 14.91% YTD. This can only happen in Nigeria, right?

4. During the week, Union Bank Plc announced that it had been granted a Mareva Injunction by a Federal High Court sitting in Lagos to seize a landed property belonging to A-Z Petroleum Limited over a N5.2 billion loan default.

The bank also asked the court for an order that would prevent the Debt Management Office (DMO), the Accountant General of the Federation (AGF), the Central Bank of Nigeria (CBN),

the Federal Ministry of Finance and the Petroleum Products Pricing Regulatory Agency (PPRA) from releasing any A-Z Petroleum funds in their custody (to the tune of N5.2 billion) pending the outcome of the suit.

5. Multi-billion dollar internet and media giant, Naspers has decided to list Multichoice its pay video business on the Johannesburg Stock Exchange next year while unbundling the shares to its existing shareholders.

The standalone unit will be called Multichoice Group and will include MultiChoice South Africa Holdings, MultiChoice Africa Holdings, MultiChoice Botswana, MultiChoice Namibia, NMS Insurance Services SA Ltd, Showmax and Irdeto Holdings.

The move would enable the firm boost its valuation as some institutional firms had refused to hold the stock because of its weighting on the Johannesburg Stock Exchange.

Naspers had in the past indicated it’s intentions to sell off the pay video arm and face its more lucrative internet businesses. While Multichoice added 1.5 million subscribers in its last financial year,

it contributes less than 10% of group revenue and is growing at a much smaller pace compared to other segments like Mail.ru and Tencents where Naspers has a significant stake.

Someday, maybe, Multichoice will also list on the Nigerian Stock Exchange.

6. World’s leading carbonated soft drink maker, Coca-Cola Co., said it has developed an interest in the cannabis drinks market and wants to take advantage of it with hopes of supplementing its declining sales.

Could this present an immense opportunity for Nigeria? Nigeria is considered a major source of Cannabis in the world, unfortunately, a large volume of the plant cultivated in the country are currently

used for recreational purposes, just as many people abuse it and govt.struggle to regulate it. There is currently no regulation in favour of the cultivation, consumption, and exportation of marijuana in Nigeria.

Yet, many large expanses of arable fields are cultivated yearly. This could, therefore, be exploited even as Nigeria stands the chance of gaining millions in foreign exchange.

7. Still on Coca-Cola, the company revealed that it is moving ahead with plans to take over Nigeria’s leading juice company, Chi Limited and aims to complete the deal early next year. News of this acquisition first broke back in 2016 but it is yet to be fully consummated.

The company however revealed that they are on track to complete the acquisition by end of first quarter of 2019. Peter Njonjo, President of Coca-Cola’s West Africa business said the company is also thinking of the rise of value brands

as they confirmed that they will be focusing on smaller bottles and cans which is another way the company is trying to woo cash-strapped consumers in Nigeria. It’s amazing how most consumer goods companies went small in the guise of selling at an affordable price point.

8. Coca-Cola recently announced the acquisition of Coffee make, Costa and Nonjo also weighed in. Njonjo said the purchase of Costa could present a “significant opportunity” in Nigeria, despite the absence of a culture of hot-coffee drinking there.

According to him, “There definitely could be an opportunity around ready-to-drink coffee here in Nigeria… Having iced coffee, blends of dairy and coffee, packaged in different formats.”

9. During the week, the FG announced that it has signed over 21% of its ownership rights in the Nigerian Security Printing and Minting Company (NSPM) to the Central Bank of Nigeria. The 21% NSPM shares are valued at about N12.69 billion.

CBN is expected to partner with De La Rue who will provide the technological transformation needed at NSPM. The website of NSPM states the CBN’s ownership structure at 88.73%, BPP at 10.33% and De la Rue at 0.94%.

This transaction got some people confused as the FG owns CBN and as such still owns the company. In fact, earlier in the month, president Buhari appointed a new management for the company.

I am guessing by selling part of its shares to the CBN, it is also ceding control to the CBN so future appointments will not be under the purview of the CBN (which is “independent” of the FG).

10.Cement giant, Dangote Cement launched its BlocMaster Cement during the week in Kano, Kano State. According to the company, the Cement “had been adjudged ideal by the country’s engineers, builders and block makers,

due to its rapid setting within an hour, its strength and top quality.” Observers claimed the Cement helps mould blocks faster especially during raining season as it is strong and sets very fast.

It appears this is meant to compete with Lafarge's ready mix?

11.Resort Savings and Loans Plc has attributed the delay in Milost Global injecting funds to a technical suspension placed on its shares. In a notice sent to the Nigerian Stock Exchange,

the company claimed it had obtained a binding and first drawdown agreement of $10 million, with a provision of immediate release of $1 million. Resort had in March this year announced a $250 million financing agreement with Milost Global.

According to the company, “The release of the fund is being delayed by the inability of the bank to value its shares through market forces. The stock is currently on technical suspension.” Milost has so far failed to seal a definitive agreement with two listed companies listed.

First was with Unity Bank which went South followed by Japaul which pulled out of an agreement following several controversies. Third time lucky?

12. Egyptian financial services giant, EFG Hermes is considering applying for an investment banking license in Nigeria.

This would enable the firm to serve clients in West Africa. The company recently announced the acquisition of Primera Africa, a Nigerian brokerage house a few weeks back.

13. Tony Elumelu Foundation, TEF, announced during the week that it is set to launch the world’s largest digital platform for African entrepreneurs and the African entrepreneurship ecosystem.

The platform named, TEFCOnnect will be launched on the 25th of October & is expected to be an open source platform, which will provide bespoke tools and content to catalyse business development for millions across the continent, through technology and directly applicable content.

14. During the week, the Central Bank appeared to have softened its stands on MTN with the CBN suggesting that they could reach an amicable solution following the allegation of the illegal repatriation of dividends.

Investors immediately reacted positively to this news as the share price rose the most in about 6 months.

Sources indicate the CBN has been under immense pressure from foreign investors and via diplomatic channels as the apparent regulatory onslaught takes its toll on future investments in the country.

Some analysts suggest a lot of deals have been put on hold following the latest fine so it appears the heat is getting to the CBN.

15.And by the way, during the week too Krispy Kreme Nigerian received a visit on Thursday from the American Ambassador to Nigeria, Stuart Symington. Interestingly, the Ambassador extolled Krispy Kreme for its quality process.

According to him, “What makes this special is the quality of people in it. The process of making the doughnut is great and awesome.”

He also opined that “the brand was brought into Nigeria because of the need to invest in the country, adding that the brand has provided employment opportunities for Nigerians, while creating value through its customer oriented services.”

16. Furniture maker,Lifemate announced a Sofa-swap campaign during the week. The company’s Public Relations Officer, Orebayo Ejiemhen said the Sofa Swap or Sofa Exchange Promo is targeted at “first 100 customers interested in exchanging their old sofas for our latest sofa designs

Apparently, the way it works is that owners of Sofa’s bought from Lifemate will have to register to participate, take a picture of the sofa and if approved will be given

a coupon with face value correspondent to subsidized amount to be deducted from price tag of preferred new sofa design. Not sure how this translates to being a swap

That's our thread for this week. Thanks to our sponsor @BluechipTechNG for making this thread possible every week.

Thanks too to all our followers for the retweets, comments, and mentions. A newsletter version of this thread will be sent to our subscribers. Kindly ignore typos.

Until we do this again next week, do have a most profitable week ahead.

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