Thread by @ugodre

Hello Everyone, welcome to @Nairametrics Corporate News Roundup for the week ended April 21, 2018. This thread is brought to you by @BluechipTechNG

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It's another loaded thread as Corporate Nigeria was busy last week. We have news from the telecoms, sector, banking, consumer goods etc.

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We begin;

1. Nestle has deepened its product offering with the latest introduction of Golden Morn Puffs which is produced locally in Nigeria.

The breakfast cereal is made from maize, millet, oats, and soya, and is fortified with GRAINSMART which I understand is a unique combination of vitamins and iron.

Nestle insists that 94% of the grains and cereals used for the production of Golden Morn Puffs is sourced locally via local farmers. It appears that we are witnessing the start of a cereal war as local producers target school kids.

Nestle’s new product will be competing with various cereal brands, especially Kellogg’s Coco Pops. Coco Pops is produced and distributed in Nigeria by Kellogg’s-Tolaram Nigeria Limited, a joint venture partnership between Europe-based Kellogg’s and Singapore’s Tolaram Group.

2. So, Budweiser is finally in Nigeria, following its launch last weekend in Lagos. From what we gather, the launch was quite elegant as they turned the Landmark Towers in Lagos into “the Bud Hotel.”

Guests were said to have checked in at the entrance of the hotel receiving card keys that they used to access the Burger bar, bottles of Budweiser, and other items on display.

Budweiser then went on to create an illusion of a hotel using a “using Z-depth visual mapping effect.” Budweiser is referred to as “the king of beers” which is perhaps why it bothered with such an elaborate launch.

It will still have to contend with more established beers in Nigeria, the likes of Star, Heineken, Guinness Stout and Harp. Perhaps its greatest challenge will come from value beers and spirits, both of which have taken significant market shares from more established brands.

3. The CMA CGM Group and Lekki Port LFTZ Enterprise (LPLE), the promoters of Lekki Deep Sea Port, announced the signing of a Memorandum of Agreement to operate Lekki Port’s future container terminal.

The future Lekki Deep Sea Port will be developed, built and operated by LPLE, a joint venture enterprise led by the Tolaram Group, the Lagos State Government and the Nigerian Ports Authority.

As the container terminal operator, CMA CGM, through its subsidiary CMA Terminals, will be responsible for the marketing, operations and maintenance of the container terminal at Lekki Deep Sea Port.

ICYDK, land around the Lekki FTZ area is fast appreciating as we approach closer to the opening of this project and the Dangote Refinery along the same axis.

4. Lafarge recently concluded one of the largest rights issues in Nigeria as it moved to fix its heavily leveraged balance sheet.

The core investor in the company, LafargeHolcim, reported last week that the recently concluded rights issue has taken its ownership in the company to 76.32%, which is more than the minimum 75% required to take effective control of the company.

By owning 76% of the company, Lafarge has enough control to even move for a delisting of the company. Will Lafarge delist?

5. Ever heard of Skretting?

It is a Norwegian aquaculture feed company with operations in Nigeria and West Africa.

The company recently announced that it is expanding its operations in Nigeria with a buy-out of a joint-venture partnership with Nigerian fish farming firm, Durante Fish Industries. Durante Fish Industries was founded in 2000 by the late Ade Alakija.

Durante operates catfish, tilapia and fish feed businesses in Nigeria. We understand that in the past three years, the joint venture opened a new fish feed plant in Ibadan and expanded its feed exports across Africa.

Skretting operates in Nigeria via an entity called Nutreco which was also the vehicle used to complete the transaction.

Skretting is planning to construct a new plant in Ibadan and open an aquaculture training facility, focused on educating local producers with Skretting’s LifeStart concept,

which focuses specifically on hatchery and nursery nutrition for juvenile fish and broodstock, according to the company.

Worldwide, Skretting has production facilities in 19 countries on five continents, manufacturing and delivering fish feeds for fish from hatchlings to harvests for more than 60 species, with a total production volume of more than two million metric tons.

6.C&I leasing reported last week that it wants to raise fresh capital to aid its expansion drive. The company claims that it needs to raise funds to buy more vessels to lease to oil companies and expand its business in Ghana as Dubai-based private equity firm, Abraaj, exits.

“We are looking at increasing our footprint in our current business, increasing our vessel and fleet management business . Our next plan is to introduce our marine business in Ghana over the next 1-3 years,” chief executive Andrew Otike-Odibi told Reuters.

How does it plan to raise capital? Corporate Bonds!! It said that it plans to raise over N7 billion on corporate bonds and will use N3 billion from the amount to finance existing debt.

It also plans to raise equity “with about 40 percent of a target of between $10 million to $50 million over the next five years coming from share sales.” I analysed C&I Leasing some weeks back and characterised the company as one in bed with debt.

7. Nigeria’s tyre market is one very competitive space and if you've noticed there has been some new entrants all jostling for a very lucrative market.

Last week, a tyre distribution firm, Tyre Express Nigeria Limited, in conjunction with Prestige Assurance introduced a one-year repair/replacement warranty on tyres purchased from any of its outlets within the country.

The Tyre Damage Guarantee is a form of free insurance policy for all its customers and it appears they hope to use this as a marketing move aimed at luring customers and locking them in.

8.P&G reported weak revenue growth in its latest quarterly results. The company revealed weak pricing on its household staples, which it said is dragging down profits industrywide.

Organic sales, a closely watched metric that strips out currency moves, acquisitions and divestitures, rose 1% in P&G’s latest quarter, below the company’s target of 2% to 3% for the year.

Prices fell 2% overall in the quarter and were lower across all five of P&G’s main business units, according to Wall Street Journal.

They also blamed price cuts on Gillette and volatility in some international markets, including Saudi Arabia, Egypt and Nigeria, as reasons for the weakness.

9.Sifax Consortium, Ocean and Cargo Terminal Services Ltd, has won the bid to operate the Terminal B, Warri Old Port.

The Bureau of Public Enterprises (BPE) announced the results of the concession process revealing that Ocean and Cargo offered the sum of $25,510,000.64 to emerge the preferred concessionaire

after its rival, Ecomarine Consortium, was disqualified for improper submission of its bidding documents. The concession is for a period of 25 years. The bid for this terminal has been on since 2014.

10.Ride Sharing App, Taxify, introduced a new safety feature for its Driver’s app during the week. The new feature is an SOS button which it hopes will help to safeguard driver partners against violence, car-jacking, robbery, and other life-threatening situations.

According to Taxify, the SOS button triggers a distress call to the Lagos State Emergency Response Agency whenever they feel insecure or find themselves in dangerous situations.

It will be interesting to see how the Lagos State Emergency Response Agency responds to this application. It is probably, in my view, a test case for how government emergency agencies can respond to technologically aided tools.

This is @Nairametrics Corporate News Thread BTU by @BluechipTechNG

11.mSurvey last week announced that it raised series A funding of $3.5 million from Venture Capital firms led by African focused venture firm, TLcom Capital.

TLcom Capital has former Minister of Communications, Omobola Johnson as one of its board members and has been on an investment spree of late.

mSurvey helps businesses track consumer feedback using cloud computing connected directly to mobile network operators. This helps businesses and organisations connect with, and receive structured feedback directly from customers.

mSurvey previously raised seed funding from Alpha Angels, Cross Culture Ventures, and Safaricom’s Spark Venture Fund. The company also plans to expand to South Africa in the next 6 to 8 months.

12.The crisis in Airtel entered a new phase after the Federal High Court in Lagos adjourned hearing in a $28, 728, 125 suit filed by billionaire, Oba Otudeko against Airtel Networks Limited.

According to reports, Oba Otudeko is alleging that the one and only Jubril Adewale Tinubu relinquished shares in O&O network, a vehicle that had about 9.9% shares in Econet Nigeria, now Airtel,

to Oceanic Bank (now owned by Ecobank) as part of the process of securitisation and foreclosure arising from loans advanced to him by Oceanic bank.

He claimed that without any formal or informal notice, they became aware that in 2001& 2003, JAT reached secret agreements to transfer all the company’s share of O&0 Network Limited in Airtel to the Delta State Ministry of Finance incorporated and Delta State Govt for a premium.

Oba Otudeko’s grouse is that JAT “breached his preemptive rights” to acquire the shares before it was transferred to Oceanic Bank.

Corporate Nigeria can be a huge mess sometimes and I wonder where this case will lead to. I mean this is a matter that took place over a decade ago and in that time, the company has changed ownership 3 times.

13.In another court wrangling, the Abuja Division of the Federal High Court has stopped the planned sale of the distressed 9Mobile, following a legal action by aggrieved shareholders of the company.

The suit was led by Afdin Ventures Limited and Dirbia Nigeria Limited, who claimed to be major investors in Etisalat. They told the court that they were left out of the firm’s decision making process, even as they demanded the refund of their invested funds estimated at $43.3m

One of the companies is allegedly owned by Alhaji Mangal and claims that the sale was clandestine and that the court should, among others, declare that the planned sale of 9mobile, without paying the plaintiffs the money that they invested in the telecoms firm, is unlawful.

They also urged the court to order the defendants to refund to them the sum of $43,330,950 with which they bought 4,303,395 shares at $10 per share. And wait for it, they also prayed the court to award N1 billion in general damages against the defendants and in their favour.

14.Without being prejudiced to the outcome of this suit, some lawyers that we spoke to suggest that the case is much ado about nothing as what is basically happening is that

the banks are selling the security they have over the shares of the majority shareholders of 9Mobile and not necessarily selling 9Mobile as a company.

Alhaji Mangal and the plaintiffs to the case, on the other hand, are shareholders in one of the companies that used to own 9Mobile and are thus not direct shareholders in 9Mobile. Maybe a corporate story on these 9Mobile issues will be done very soon.

15.On a brighter side, in a major deal, MTN has appointed Chapel Hill Denham as lead manager for its planned initial public offering. It also appointed Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital as joint issuers.

Chapel Hill has secured major deals of late and I am pretty sure that staff of the company have earned their bonus already.

Last year, it was the issuer of the largest rights issue in recent history, Lafarge Africa. It also handled the rights issue for Union Bank and the FGN Sovereign Green Bond. MTN’s IPO listing is said to be targeted at raising $400 million this year and is scheduled for July 2018.

The company is said to be worth $5.23 billion. MTN is also working with Stanbic IBTC bank and has not listed any other Nigerian banks.

16. Still on MTN, CRC Credit Bureau announced it has partnered with the telecoms giant with a new product, “Mobile Credit Check”. It is a USSD enabled service that enables individuals and merchants to have access to credit reports on their mobile phones.

So by dialing *565*8*3# on your mobile phone, you can get the credit report of a borrower instantly (I tried it and I got nothing).

But according to CRC Credit Bureau’s managing director, Tunde Popoola, “Registered merchants or business entities alike can also grow business volumes and increase sales revenues

by instantly knowing which customers can enjoy consumer products to pay later by dialing *565*8*3# and reviewing their customers’ credit worthiness.

This not only gives them a competitive advantage, but also builds customer loyalty and retention,” CRC Credit Bureau has several other product offerings but this looks like their first attempt to commoditise their service.

17. Unity Kapital has finally changed its name to Veritas Kapital Assurance Plc. Veritas recently became a core investor on Unity Kapital following the acquisition of 50.3% equity owned by Unity Bank Plc.

In 2016, Veritas Capital acquired 4.16 billion shares of Unity Kapital Assurance at 77 kobo.

18.We have a “one-chance” story this week. A while back, a microfinance bank, Ohha accused Sterling Bank that it allegedly made a fixed deposit of N138.9 million and N80.13 million in its Sterling Bank accounts through Oliver Anidiobi, its account manager.

The microfinance bank is based in Enugu. According to the MCB lawyers,

“At the maturity of the two fixed deposits on the 15th August, 2017 and 19th October, 2017, respectively, the management of Sterling Bank

served our client new fixed deposit certificates, claiming that the investment had been rolled over automatically on maturity to another tenor of 90 days,"

This action of Sterling Bank prompted our client to write another letter dated 25th October, 2017, to Sterling Bank requesting again that the bank terminate the fixed deposits and credit our client’s current account with the value.”

However, Sterling bank via its lawyer, Festus Keyamo is claiming that the MCB had no proof that it ever invested in a fixed deposit in Sterling Bank suggesting perhaps that the account officer was who they handed the cash to.

Could this be a classic case of fraud that we often see in banks? Looks like the MCB handed money over to its account officer who then diverted the money instead of investing it in a fixed deposit.

19.Still on Sterling Bank, it launched a new mobile banking app known as I-Invest. It claims the app will help build a savings and investment culture in Nigeria.

The app would allow its customers to easily have access to invest in products like treasury bills, fixed deposits and perhaps corporate bonds.

For a potential customer to register, he needs to have a BVN, valid phone number, utility bill, and valid means of identification such as driver’s license, national identity card or international passport.

The registration process takes less than five minutes to conclude but the potential customer needs to take a picture with his smart phone and upload it.

This looks like a really interesting product and one that could take the cheese off stock-brokerage firms who are quite slow in expanding their retail investing footprints.

I can imagine what will happen to them if other major banks start to offer this product leveraging on the ubiquity of their apps.

20.Jumia released details of its full-year 2017 financial statements results last week. The result shows a Gross Merchandise Volume GMV growth from EUR357.5 million in 2016 as against EUR 507 million (N225.2 Billion) recorded in 2017, representing a 41.8% growth in its GMV.

The GMV measures the volume of sales on an ecommerce platform and includes money belonging to owners of the products sold via its platform.

Jumia also grew GMV by 64.5% to 197,9m EUR (+113% in constant currency) in the fourth quarter of 2017, compared with 12.2m EUR in fourth quarter 2016.

Jumia marketplace platforms significantly scaled the number of orders with a YoY growth of +94% in Q4 2017. I wasn’t too surprised by the result but a 64.5% growth in GMV year on year is quite significant.

Jumia makes money from the commission it makes from GMV and sustaining this level of growth across it markets in Africa is critical to its survival.

The new Konga is now a major threat to its market share in Nigeria and they will need to keep cash aside to fight perhaps a bigger threat to their survival.

That's the end of our thread for this week. Hope you enjoyed this week's compilation BTU by @BluechipTechNG

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Thanks once again and till we see again, do have a profitable week ahead.

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