Thread by @ugodre

Hello everyone, welcome to @Nairametrics Corporate News Thread for the week ended December 9th, 2018. This thread is BTU by @BluechipTechNG

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1/ The Federal Government has given the Cross-River Garment Factory (certification) license to export its products beyond the shores of Nigeria to other parts of the world, like the US, Europe, Asia, and other parts of Africa.

According to the CEO of NEPC, Olusegun Awolowo, represented by the Regional Coordinator, South West, Babatunde Faleke, the garment factory is now set to export its products to any part of the world after conducting a three-week intensive training for the staff of the factory.

The factory is located on 2000 square meters of land in Calabar and contains more than 2000 electric powered garment production machines. Last October, the state government announced a partnership with Blue Ocean, India and unveiled sets of wears from the garment factory.

2/ Shareholders of Consolidated Hallmark Insurance Plc gave approval for the company to raise 1.13 billion units at the price of 65 Kobo per share, which would bring in an additional N734.5 million to the company.

Just last year, the company raised N500 million through a rights issue and used the proceeds to acquire a life insurance firm and set up a Health Maintenance Organisation (HMO), Hallmark HMO.

On the grand scheme of things, these are small capital raises and signify just how much capital insurance companies need to serve the wider economy. We keep saying this is the most underrated industry in this country and one still requiring significant capital injection.

To put things into perspective, the entire insurance industry (quoted on the stock exchange) is valued at about N112.6 billion which is less than 10% of the banking sector, valued at N1.65 trillion.

3/ A report by NewZoo, a global provider of games and e-sports analytics, reveals that Nigeria generated about $180 million in revenue between January and October 2018.

Egypt, however, leads the rest of the continent with $286 million in revenue for the same period. Algeria generated $142 million and is number three in Africa. South Africa made $129 million and Kenya earned $31m from gaming activities this year ended October.

However, out of 100 countries that the study covered globally, Egypt ranked 37th, Nigeria ranked 45th and Algeria ranked 54th, South Africa ranked 56th while Kenya ranked 89th. China led the top 100 countries by game revenues with $37.9bn in revenues.

4/ Last week, Nairametrics reported that American global fast food outlet, Burger King (BK), plans to enter the Nigerian market as it looks outside the U.S for growth.

According to Daniel Schwartz, Chief Executive of Restaurant Brands International parent company of Burger King, the Nigerian market is the next target of the company leveraging on the huge population of about 190 million with an average age of 18 years— a burger-loving age.

Is Burger King ripe for Nigeria? Following the runaway success of Dominos Pizza, analysts believe that Burger King will also succeed, provided it focusses on a strong route to market.

KFC has struggled of late, compared to Dominos but analysts are betting that burger sales is an area that is yet to be fully explored.

5/ Lafarge Africa announced that it will be raising a whopping N89 billion via a rights issue. The cement maker says that it will raise N89.21billion by way of a rights issue at N12.00 per share, by issuing 6 new shares for every 7 shares held.

The rights price represents a 10.45% discount on Lafarge Africa’s traded closing price of N13.40 as at Monday, 3rd December, 2018. Interesting to note that at the time Lafarge initially announced this rights issue, its share price was N27.

At N12 they are not going to be selling for less than half the price. Lafarge has been grappling with losses over the years as its Nigerian entity continues to carry loss making subsidiaries, especially in South Africa.

This is @Nairametrics Corporate News Thread BTU by @BluechipTechNG

6/ In case you lost track, the ongoing trial between embattled telco-giant, MTN Nigeria and the Attorney General of the Federation over a $2 billion tax demand has been adjourned to February 7, 2019, as the presiding judge, Justice Saliu Saidu, was away on administrative leave.

MTN faces a $2 billion tax demand from Nigeria’s Attorney General, a claim which the company has vehemently denied. It appears that the Federal Government is yet to file a full reply to MTN’s suit.

The new date falls right in the middle of the election season. Meanwhile, MTN is still pushing for an out of court settlement over the $8.1 billion fine imposed on it by the CBN. MTN had filed a suit to challenge a directive by the CBN directing it to return the $8.1 billion,

which the apex bank said was illegally repatriated. When the case was called, MTN’s lead counsel, Chief Wole Olanipekun (SAN), said his client had decided to pursue an out-of-court settlement with the CBN.

7/ Shareholders of VFD Group Limited have approved plans by the management to raise additional N7 billion capital as it seeks to expand its business portfolio in the coming year.

The group announced plans to establish a presence in every key sector of the financial services industry including the acquisition of a banking license.

The company is currently raising about N billion in private placement which it plans to use as “equity investment in a financial institution”.

Shareholders also approved the conversion of the company from an LTD to a Plc. In its financial report for the year 2017, the Group’s total assets grew by 45% from N2.2 billion in 2016 to N3.1 billion in 2017.

According to the company, this growth was driven by an increase in financial assets which grew by 25% from N1.7 billion to N2.2 billion. The company also reported a loss after tax of N66 million, lower than the N74 million losses included in 2016.

However, looking through their prospectus, the company reported profit after tax of about N538.8 million in the first 9 months of 2018.

8/ We have been following the story of VFD for some years now and it is interesting to see how far they’ve come. The company was founded by Nonso Okpala (former CFO of Tony Elumelu’s Heirs Holding) and Adeniyi Adenubi as a side hustle.

They were initially into micro-lending before acquiring a BDC license and a microfinance license. They acquired Germaine Autocare some years back in a deal that perhaps brought them into limelight.

Nonso is often referred to as one of the rising whiz kids in the financial services space and one to take note of.

9/ The National Industrial Court of Nigeria has ordered Nigerian Breweries Plc to include its early retirement policy in its staff handbook.

Justice Ogbuanya ordered the firm to specify the pre-qualification, notice period and severance package in order to avoid litigation of the policy.

This all started when a former employee and Export Manager, Bala Muhammed, had claimed that N5.3 million was wrongfully deducted from his severance package when he opted for early retirement under the company’s Early Retirement Policy.

The company claimed that the deduction was valid as it was the sum equivalent to five months’ salary in lieu of his early retirement notice. The firm added that Muhammed was not entitled to full payment of the severance package without such deduction under the policy.

However, Justice Ogbuanya awarded a sum equivalent to three months to the claimant, noting that the sum represents the notice period established in evidence for exercise of termination right by an employee of Muhammed’s status.

HR peeps can help explain the implication of this

This is @Nairametrics Corporate News Thread BTU by @BluechipTechNG

10/ MTN launched the first Disney mobile web service in Nigeria, Disneynigeria.mobi, loaded with Disney-themed short-form content, games & shareable. We understand that the service is as a result of a collaborative effort between MTN Nigeria & The Walt Disney Company Africa.

The two-year deal grants MTN Nigeria exclusivity for the first year of the collaboration. MTN is understandably excited about this development, with General Manager, Brands and Communication, MTN Nigeria, Richard Iweanoge saying,

“We are presenting a world of Disney straight to our customers’ fingertips at a truly affordable price, and we are confident of the fulfilling entertainment they will derive from this.” From what we gather, the service costs N200 per month and new content will be updated monthly.

Users will experience fresh content including games like Frozen Double Trouble, Gravity Falls and Mabel; wallpapers from fans' favourite shows and short films like Cars Toons and more. No idea yet how much this deal will cost MTN. Content is KING!!

11/ Airtel announced that it has also applied for a payment banking license. The telco wants to also establish a Payment Service Bank (PSB). Airtel claimed that it intended to leverage its distribution to drive financial inclusion among the unbanked and financially excluded.

MTN has also applied for a similar license threatening to change the landscape of mobile banking in Nigeria. Nigeria has recorded a 50 percent increase in the volume of mobile money within January to September this year.

Figures released by the Nigeria Interbank Settlement System (NIBSS) show that in the nine months under review, volume of mobile money transactions was N1.2 trillion. This is a huge increase, compared with N795.18 billion recorded in the same period last year.

The figures also revealed that the number of mobile money customers rose from 3.2 million recorded in 2017 to 5.54 million during the same period this year.

12/ A Lagos State High Court has granted an interim order restraining Global Resources Management Limited and Lagos Deep Offshore Logistics (LADOL) from ejecting Samsung Heavy Industries (SHIN) Nigeria Limited and its subsidiary, SHI-MCI FZE, from the LADOL free zone in Lagos.

The court order apparently restrains LADOL from further unlawful interference with Samsung’s use of its fabrication and integration yard within the LADOL Free Zone Area.

Nairametrics had reported that the management of Global Resources Management Limited (GRML), a subsidiary of LADOL banished Samsung Heavy Industries (SHI) Nigeria Limited from the LADOL Free Zone in Lagos.

SHI was barred from LADOL’s dockyard over an alleged expired operating licence and “unremedied and material breaches of sublease covenant.” There are indications that the SHI banishment would likely affect the flow of the $3.8 billion Egina FPSO Project.

13/ The CEO of Access Bank had a message for those thinking Fintech could end up wiping out traditional banking services.

At a Fintech event during the week, Herbert Wigwe remarked that “Fintechs have become the next big thing in Africa, and in a few years, could change the face of financial services as we know it.

While banks and other financial service providers may feel threatened, the presence of fintech would most likely improve traditional financial service, rather than phase it out.

This means the financial service sector has a chance to grow alongside Fintechs, through Co-creation, Collaboration and Co-opetition.” Is this an olive branch or is he suggesting that banks are willing to cooperate with Fintechs?

Whatever the case, the financial services sector will have to rely on the “frenemies” doctrine if it hopes to be innovative and relevant. Wigwe still offered a jibe at Fintech companies, urging them “to transition from just being buzzwords to solving real world problems.”

14/ Reports emerged during the week that a Nigerian-based hacker group, ‘London Blue’ is trying to trick thousands of top executives across the globe into sending them company funds.
In a report by cybersecurity firm, Agari, the ambitious scheme mainly targets

Chief Financial Officers via mail and has reportedly compiled a list of 35,000 chief financial officers, including some at the world’s biggest banks and mortgage companies, in a bid to target them with fraudulent requests to transfer money.

According to the report, “Of the ‘London Blue’ hit list, 71% of targets held the title CFO, while the remainder were senior members of finance teams including finance directors, controllers and members of accounting.

The majority of targets are based in the US, with remaining targets based in a host of nations including Spain, the UK, Finland, and Egypt.” It appears these guys have a sophisticated modus operandi.

15/ In line with its plans to divest from the drinks business, Consumer Goods giant, Unilever, has announced that it has agreed to buy GlaxoSmithKline’s hot malted drink, Horlicks for around $3.8 billion, further boosting the consumer group’s position in a key emerging market.

The transaction also covers GSK’s health food and drinks portfolio in India and some Asian markets. GSK’s decision to sell the business follows its $13 billion acquisition of Novartis’s stake in the two groups’ consumer health joint venture this year.

GSK said at the time that selling Horlicks could support the funding of the Novartis buyout. What are the implications? For starters...

Distributors of Horlicks will now need to realign their contacts as this decision could soon affect Nigerian operations, probably throws open new doors for potential distributors and existing GSK distributors.

16/ In an apparent surprise (well maybe not, if you consider their antecedents), Central Bank of Nigeria (CBN) has unveiled plans to commence retail banking services next year in partnership with the Nigerian Postal Service (NIPOST) by setting up a National Microfinance Bank.

. CBN Governor Godwin Emefiele disclosed this during the week at a retreat organized by the bankers’ committee. According to him, the CBN is considering the proposal for the establishment of the national microfinance bank,

which would leverage on the Nigerian Postal Service presence in 774 local government areas across the country.

As usual, Godwin Emefiele claimed that this move would enable the CBN create jobs and enhance skill acquisition in the rural communities. I understand NIPOST leveraging on its branch network to offer micro banking services, but we do not think they need to partner with the CBN.

It is bad enough that a government agency is competing with banks and Fintech companies, not to talk of adding the might of the CBN.

That's our roundup for the week.

Thanks to @BluechipTechNG for the support this week. Special thanks also to @Nairametrics team for putting this together.

Thanks also to you are followers for all the retweets and comments...far too kind.

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

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