Thread by @ugodre

Hello everyone, welcome to @Nairametrics Corporate News Roundup for the week ended December 1, 2018. This roundup is brought to you by @BluechipTechNG

Thread Starts here.

As usual, kindly retweet the first tweet of this thread so others on your timeline do not miss out. Also feel free to retweet or comment on any of the tweets published in this roundup.

We begin....

1/ Industry sources inform Nairametrics that Nigerian deposit money banks (DMB) are nervous about the impending entry of telco giant, MTN into the payment space.

MTN was granted a Payment Service license recently by the CBN allowing it to launch a mobile banking operation by Q2 next year. Some banks are understandably apprehensive about this development sensing the increased competition could further impact their bottom line.

Sources also inform Nairametrics that banks have for years frustrated this effort relying on the influence of the Bankers Committee (banks cabal) to force the CBN to refuse approval.

However, with little to no success from the CBN’s financial inclusion initiative, despite spending billions, it has now caved in. One source feared that MTN’s 50 million subscriber base clearly gives it an edge over banks.

2/ Meanwhile, it appears there is brewing crisis between Telecom service provider and commercial banks over the increasing incidence of SIM swap fraud in the country.

Speaking at the inauguration of the newly elected executives of Industry Consumer Advisory Forum (ICAF), the Executive Secretary, Association of Licensed Telecoms Companies of Nigeria (ALTON), Gbolahan Awonuga,

noted that telecos should not be blamed for losing cash to fraudsters through SIM swap. According to him victims should blame their banks for whatever happened to the money kept in the custody of the banks.

The NCC had also blamed banks of complicity over the increasing wave Subscriber Identity Module (SIM) swap fraud in the country.

Meanwhile as all this was happening, the Nigeria Security and Civil Defence Corps (NSCDC) in Kwara said it arrested five suspects for allegedly hawking SIM cards and registering patrons without being accredited to do so.

They said that that two of the suspects confessed to the “crime”, saying that they were new in the business. I never knew this was a crime. How do you even begin to explain this to a judge?

3/ The board of Continental Reinsurance Plc (CRE) received an offer from its parent CRe African Investments Limited (CRe Investments), to acquire all the outstanding and issued shares of CRe Nigeria.

CRE Investments claims it is “making this offer in order to initiate a much-needed restructuring exercise for CRe Nigeria, with a view to consolidating the CRe Nigeria’s operations and repositioning it for enhanced competitiveness in the global insurance market.”

CRE Investments is offering N2.04 per share for the 10,372,744,314 ordinary shares of 50 kobo each, for the shares it does not own. The proposed Scheme Consideration represents a 46.76% premium to the last traded share price of the Company on October 5, 2018,

being the last business day prior to the date the proposal was received from CRE Investments and a 36.00% premium on the trading price as at close of the last business day; November 19, 2018.

So what next?

As expected, the share price spiked to N2 at close of Business on Friday its highest in over 5 years. If you own this stock now better hold on to it till the price crosses N2.04.

4/ So the much-awaited Airtel IPO gathered steam during the week as the parent company Bharti Airtel announced the appointment of eight international banks to coordinate the London initial public offering for its Africa business.

The International banks includes J.P Morgan, Citi Group, BofA Merrill Lynch, ABSA Group Limited, Barclays Bank Plc, BNP Paribas, Goldman Sachs International, Standard Bank Group.

Interesting that no Nigerian bank made the cut despite their growing international presence and the fact that most of the money raised will be invested in Nigeria.

Airtel Africa is a subsidiary of India’s Bharti Airtel Limited, also announced that it had raised $1.25 billion from six global investors. Among the new investors are SoftBank Group Corp, Warburg Pincus LLC and Temasek Holdings (Private) Limited.

The $1.25 billion fund, which was sourced through a primary equity issuance, now values the telco at $4.4 billion and will be used to reduce existing debt of about $5 billion and grow its Nigeria and other Africa operations.

At $1.25b, that’s fees of about $60 million off the table for Nigerian investment and advisory businesses.

This is @Nairametrics thread BTU by @BluechipTechNG

5/ Reports emerged during the week that MTN Chief Innovation Officer, Herman Singh is looking to depart from the group to start his own tech venture.

Singh was recruited from rival Vodacom Group in 2015 to help lead the telecom giant’s innovation drive in a world that is Increasingly digital and powered by mobile.

His imminent departure is creating a bit of a stir considering that just recently, MTN’s Chief Technology Officer, Babak Fouladi left to join Dutch Telecommunications firm, KPN NV next week. Fouladi was lured from Vodafone Group two years ago.

Another top shot of the group, Stephen Van Coller left MTN at the end of August to hold the technology firm EOH Holdings Ltd less than two years into his tenure.

6/ Waltersmith Petroman Oil Limited CEO, Abdulrazaq revealed during the week that the oil and gas company plans to build a power plant that will “service the gas we produce”.

According to him, once you can make power available, you can also energise industries. It is just the sheer size of the opportunity that is making us to position our company properly in the market.”

Isa also claimed that in the next 10 years the company is planning to increase its oil production capacity to 100,000 barrels per day. Well, the company is currently on 5,000 barrels per day, so they have a pretty long way to go.

In terms of strategy, they want to place their power plants close to the crude they produce. Reports suggest they plan to invest about $2 billion over this period.

7/ Stockbrokers were given something to think about during the week after a panelist at the African Securities Exchanges Association (ASEA) annual conference themed that took place last week in Lagos.

Reggie Middleton, the Disruptor in Chief as he likes to call himself, spoke to Nairametrics on the sidelines of the event. According to Reggie, his company, Veritaseum, a United States-based blockchain technology firm is looking at an introduction of blockchain technology into

Africa’s capital market that will eliminate the services of middlemen and thereby reducing transaction time.

“I am looking at signing agreements with several exchanges and I feel we are very close, I don’t want to reveal other private information and I expect them signed before I go back to New York.”

He also claims that if stockbrokers across Africa don’t diversify, they might be phased out as a result of this disruption.

Well, to get this done, he will need to get approval of a sluggish SEC and cabal laden stock market. But I fear this is inevitable.

8/ As the relationship between greenhouse emission and climate change continue to be a source of concern to many people, a little-known Nigerian energy company — Matrix Energy Limited — has taken a major step towards proffering a solution.

The company is doing this by investing in the Liquefied Petroleum Gas (LPG) business, with hopes of providing Nigerians with cleaner and supposedly cheaper source of cooking energy.

According to head of marketing at Matrix Energy, Mrs Toyin Sowunmi Matrix Energy Limited currently supplies about 30% of Petroleum Liquefied Gas across the country.

The company has a total of 65 LPG trucks which distributes its product across the country, even as it hopes to acquire more. Does that give them market leadership in this space?

9/ Tier one lender and one of the FUGAZ banks, Access Bank will redeem a $400 million Eurobond, which was due by 2021 this year. Chief Financial Officer (CFO) of the bank, Seyi Kumapayi disclosed.

In addition, he stated that the bank is considering other funding sources to keep its capital adequacy ratio at 20%, higher than regulatory requirements. So why are they redeeming loans that are supposedly due in 2022?

The bank gave no reasons, but we suspect banks are wary of holding foreign currency loans in the event of a looming devaluation.

The CBN Governor has insisted that he is not devaluing but analysts believe a devaluation could be imminent of power changes hand next year and as such banks don’t want to be caught up.

Another possible reason is the higher interest rate environment for foreign currency related loans and since banks are not lending anyway, no point carrying risky liabilities.

Another FUGAZ member, FBN Holdings in August redeemed a $300 million Eurobond that was due in 2020.

10/ After much controversy, shareholders of Cement Company of Northern Nigeria (CCNN) have approved the company’s merger with Kalambiana cement. They did so during an Extra Ordinary General Meeting (EGM) held in Sokoto.

The company disclosed this in a series of tweets from the BUA handle. According to terms of the deal, shareholder of Kalambaina Cement will receive 19,811,732 new ordinary shares of CCNN for every 100,000 Kalambaina cement.

All assets and liabilities of Kalambaina will be transferred to CCNN. CCNN will, however, not accrue, any form of debt from the newly constructed plant.

The controversy surrounding the deal surfaced after some analysts believed CCNN was undervalued ahead of the merger giving shareholders of Kalambiana a better deal.

However, CCNN believes the merger serves everyone, stating that will increase CCNN’s capacity to 2 million tonnes, which is four times its current installed capacity and economies of scale to be able to compete with more larger cement plants in Nigeria.

Kalambiana Cement is a wholly owned subsidiary of BUA Cement Company. BUA is also a related party to Damnaz Cement Company the controlling shareholder in CCNN.

This is @Nairametrics thread BTU by @BluechipTechNG

11/ As pressure continues to intensify on Diamond Bank, the CBN last week granted a National Banking license for the Tier 2 bank. The bank’s shares have fallen from about N1.15 to 65kobo in about a month pricing it at just 7% book value.

Investors dumped the share following a string of resignations and rumoured board room squabbles. Diamond Bank sold of its subsidiary businesses thus requiring that it relinquishes its international banking license.

Some analysts believe this move also somewhat reduces the pressure on the bank as national banks have a lower Capital Adequacy Ratio requirement compared to International Banks.

CEO Uzoma Dozie, mentioned this subtly claiming, “The reduction in minimum capital requirement also increases our capacity to expand the quantum of business and product services we can offer consumers, as well as representing a key step in strengthening our financial position.”

12/ The Nigerian Government awarded mining contracts to ten exploration and consulting companies The Minister for mining and steel Abubakar Bawa Bwari revealed this during the week.

According to him, “recently we gave a contract to four exploration companies, with six consulting firms to explore our mineral resources focusing on gold, zinc, iron ore, rare earth metals,”.

He said, “Apart from the normal budgetary allocation government has given intervention of $100 million and we are focusing on exploration,” The World Bank has also provided $150 million for spending in the mining sector and is thought to be worried about the slow pace.

. Looks like mining could be the next “oil” in Nigeria.

13/ Looks like the Bureau de Change (BDC) market is about to be disrupted.Last week a marketing and logistics company, Daitrans Logistics Services Ltd, says it has developed an android app, N9raforex, “that will open a new era for BDC customers & the digital economy in Nigeria.”

The company’s managing director, Henry Uzodinma, said N9raforex was a real time price discovery that would allow various stakeholders access real time information on BDCs’ activities.

It appears the way this will work is that customers looking to purchase fx can visit the app, select the best prices and then obtain the contact of their preferred BDC. I wonder why no one thought about this all along.

14/ In an interesting development, the Senate on Tuesday attempted to obtain the assistance of the Federal Government to halt the implementation of a new excise duty rate on alcohol and tobacco. The new excise duty came into effect in June.

According to the Senate “a pause would give all stakeholders in the beverage and tobacco industries an opportunity to agree on a consensus rate and implementation approach.”

The report also reveal that the senate also asked the federal government to sensitize both producers and consumers of alcoholic beverages and tobacco products to understand

why there was a need to increase the tariff rates to help boost government revenue and provide additional resources to government to invest in the country’s healthcare system.

By the way here are the new rates. Under the new rate, beer and stout will attract .30 kobo per centiliter in 2018 and .35 kobo per cl each in 2019 and 2020.

Wines will be levied with ₦1.25k per cl in 2018 and ₦1.50k per cl each in 2019 and 2020, while ₦1.50k per cl was approved for spirits in 2018, ₦1.75k per cl in 2019 and ₦2 per cl in 2020.

15/ Despite NCC approving the transfer of 9mobile to Teleology Holdings Limited, the investment company is yet to get an operational license. Nevertheless, lawmakers riled that the deal was consummated without adhering to their instructions calling for the deal to be halted.

“The last time we met, our decision was for everybody to go back and that anything that was happening on the sale, take-over or transfer of license, the committee should know about it.

Unfortunately, the committee read on the pages of newspapers that Teleology had taken over 9mobile. “We as a committee do not know anybody called Teleology because they have never appeared before this committee.

I believe that NCC should know whoever Teleology is and be able to help us to call them. Unfortunately, they are not here again today.”

The NCC responded swiftly that they were not the ones who sanctioned the sale explaining that the deal was done between a consortium of banks, CBN, 9 Mobile and Teleology. Doing business in this country can be quite frustrating.

With government, regulators and national assembly always getting in the way of business investors continue to place a high-risk premium on every single dollar invested in this country. It probably doesn’t matter to government, but we all get to suffer one way or the other.

That's our roundup for this week. We hope you found them informative and engaging.

Special thanks once again to @BluechipTechNG for their support for this roundup.

We also thank the @Nairametrics team for steadfastly putting this together every week. A newsletter version of this thread will be sent to our newsletter subscribers with relevant links.

Thanks to all our followers and anyone else who reads our roundup. We love your feedback to do keep them coming.

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

*End*