Thread by @ugodre

Hello Everyone. Welcome to @Nairametrics corporate news roundup for the week ended May 12th 2018.

This thread is BTU by @BluechipTechNG

Thread Starts here

As usual, indulge us by retweeting the first tweet on your timeline. We love your feedback and contribution, so do keep the comments flowing in. We all learn together

Welcome to our new followers and anyone just reading this thread for the first time. We do this every Sunday 10 pm.

Have you subscribed to our Newsletters? Our Newsletter subscribers get to read this first. Simply follow this link to subscribe

eepurl.com/bqFzI9

1. Access Bank and Kia Motors announced a new vehicle scheme which appears to be targeted at working class Nigerians with 9-5 jobs.

The finance scheme tagged, ‘Drive Your Dream, Pay at Your Pace’ allows participants to get a 4-year loan at a “four-year repayment tenor, free insurance, discounted price, low interest rate and competitive equated monthly instalments.”

It also comes with a 10% equity contribution. From experience, low interest rates will probably be somewhere between 19% and 22% per annum.

2. In anticipation of its proposed IPO in Nigeria, MTN announced that it is looking to raise $1.1 billion (N400 billion) for its Nigerian Unit. MTN’s debt proposal is part of its revised strategy of borrowing in local currency in the countries where it operates.

This model makes sense considering that foreign denominated borrowings exposes the group to attendant foreign currency risks. Nigeria is currently experiencing a corporate bond bonanza with demand increasing for high yielding bonds from blue chip companies.

3. There was more controversy for the Teleology 9mobile acquisition bid following a BusinessDay report during the week.

The report suggested that Teleology may be finding it difficult to raise funds from local Nigerian Banks to fund the balance $250 million required to pay for the shares,

as well as extra $150-200 million in additional funding required to keep the struggling telco right behind its competition. Reports also suggest that Teleology is lining up Afrexim and UBS as possible financiers for the deal.

Like I mentioned a few weeks earlier, getting a loan to acquire equity in 9mobile will be a wrong move for Teleology and to a large extent, the sector. This company needs long term patient capital if it is to have any chance of survival in the medium to long term.

Typically, debt financed acquisitions result in the parent company repaying the loans from the cash flows of the target company, starving the latter of funds it can use to expand its operations.

The excuse they give is that debt finance funding is merely a bridge and will soon be replaced by equity.

4. Caverton Helicopters, a subsidiary of Caverton Offshore Support Group Plc, has commenced its Chevron logistics support contract by taking the first official flights to Excravos on Sunday the 1st of May.

Two helicopters, a Bell 407 GXP and a Bell 412, were flown to the facility by Caverton’s Chairman, Capt. Josiah Chioms and Capt.

and Capt. Daniel Pam with his co-pilot, First Officer Atonyapagha Oruh, respectively.The company had last year secured a 5-year logistics contract with Chevron Nigeria Limited after a competitive tendering process.

The contract, which comes with a 2-year renewable option, would see the aviation company provide logistics support for the oil company which currently operates the NNPC/Chevron joint venture in Excravos.

5. Seplat Petroleum Development Company Plc has announced plans to drill five new wells in its three production wells in Oil Mining Leases (OMLs) 4, 38 and 41, as part of the company’s efforts to sustain optimal production and strengthen its operations this year.

Two oil production wells in Ohaji South in OML 53 and one oil production well workover at Jisike and flow line installation, also in OML 53, are some of the wells to be drilled to enhance productivity.

It has also set its capital expenditure (Capex) at $100 million. It recently successfully refinanced its existing $300 million revolving credit facility due in December 2018 with a new 4- year $300 million revolving credit facility due in June 2022.

The proceeds will be used to repay and cancel existing indebtedness.

This is @Nairametrics Corporate News Roundup BTU by @BluechipTechNG

6. Japaul oil and gas has announced that it will pull out of the equity financing facility of $350 million with Milost Global Inc.

In a statement signed by the company’s Acting Managing Director, Akin Oladapo, it noted that in view of the several red flags associated with the planned equity injection, the company has decided to pull out of the deal.

Recall that Japaul entered into an agreement with Milost Global Inc for a financing facility of $350 million under the Mesa Fund 1, a global opportunity fund that is managed by Milost Global Inc.

However, revelations by BusinessDay and other media outlets regarding the integrity of the deal has now resulted in a rethink by the company. Ironically, the CEO of the Japaul had admonished BusinessDay for criticizing the deal, calling them out that their report “purports lies”.

7. Nigeria’s 5 biggest banks First Bank, UBA, GT Bank, Access Bank and Zenith Bank (collectively known as FUGAZ) made a total of N68.1 billion from electronic income in the 2017 financial year. This translates to a 4.2% drop compared to the N71.7 billion reported in 2016.

Our report in 2016, stated banks’ e-business income as N95.8 billion. However, some of the banks restated or reclassified how e-business income is reported in their 2016 results.

Tier 2 banks such as Fidelity Bank and Stanbic IBTC reported N1.76 billion and N1.22 billion respectively in 2017 compared to N6.6 billion and N1.2 billion respectively in 2016.

First Bank leads with N24.9 billion from electronic income in 2017, a 14.2% increase from the N21.8 billion it made in the prior year. UBA came a close second with N20.9 billion as electronic business income in 2017. UBA lead in 2016 with over N30b in E business income.

8. Suntory Beverage & Food Nigeria Ltd, the company that last year acquired GSK’s drinks division (Lucozade and Ribena) revealed that it is looking to double sales over the next five years by “adding products and widening distribution in Africa’s most populous country.”

The Japanese owned drinks maker said that it plans to increase sales to N40 billion ($111 million) from about N20 billion.

According to its Managing Director, Chinedum Okereke, this will increase the Nigerian unit’s contribution to its Japanese parent’s revenue in Africa, the Middle East and the Caribbean to as much as 65%, he said.

9. World leading energy company, Vitol, says that it has been in talks with stakeholders in Nigeria to monetise the country’s flared gas.

The company’s Head of Gas and Power Investments, Steven Brann, disclosed that the move became imperative as global energy demand approaches its peak.

Brann expressed optimism that liquefied natural gas and the acquisition of other assets would help Vitol achieve growth, just as the demand for cleaner burning fuel is expected to rise in coming years.

10. Shareholders of Unilever Plc have approved the plan by the company to divest its spread segment to Sigma Bidco. Unilever’s spread business currently includes the production of Blue Band Margarine.

Recall that in 2017 Unilever, in a letter of notice sent to the Nigerian Stock Exchange, announced its intention to divest its spread business adding that it plans to consolidate its food and refreshment business.

11. Barely a week after Emzor Pharmaceuticals Limited, Peace Standard Pharmaceutical Limited, and Bioraj Pharmaceutical Limited were sealed off by NAFDAC after being implicated in the codeine syrup crisis, the regulatory agency has finally reached a decision to lift the shutdown.

Professor Mojisola Adeyeye, NAFDAC’s Director General, stated in a press release that the investigation still continues.

All production of codeine-containing syrup is still indefinitely suspended, even as administrative fines of undisclosed sums were imposed on the three companies.

This is @Nairametrics Corporate News Roundup BTU by @BluechipTechNG

12. Zinox Technologies Ltd has finalised arrangements to expand its hardware assembly and production capacity with the acquisition of a 129,166.925 square feet warehouse. .

The company is also considering the deployment of Robotics in handling the certification processes in the new assembly plant which will be located in Ogba Ikeja, Lagos

Through the new facility, Zinox will assemble the products and devices of other multinational OEM which it has recently signed agreements with in a bid to domesticate technology and generate employment opportunities for many unemployed but skilled Nigerians.

13. Paxful, a peer-to-peer bitcoin technology, announced that it will build a blockchain technology incubation hub in Lagos, as part of its growing investment in Africa.

The hub will launch in fall 2018 and provide co-working space and services including mentorship, corporate and individual blockchain training, and networking for ICO advisors.

Paxful has also appointed Chuta Chimezie as Regional Director of Africa. Paxful's platform has 1.7 million monthly active users globally, and offers 300+ payment methods.

Some of the most popular methods include bank transfer, Paypal, Western Union, Amazon Gift Cards, and iTunes Gift Cards.

14. Lagos State Government confirmed last week that rice production would start at the Imota Rice Mill in Ikorodu by February 2019. It will have a production capacity of 32,000 tonnes per hour.

They also said that the entire area, covering 8,000 square metres, with a light industrial park, would create jobs for 250,000 people. The mill would also have a warehouse to accommodate 20,000 metric tonnes of rice.

15. Mobil Producing Nigeria Unlimited, last week announced plans to invest up to N13 billion ($43 million) in three areas: community health, economic empowerment and education projects in Akwa Ibom State in the next 18 months.

The three projects include a technical skills centre in Ikot Akata, a trauma centre at the University of Uyo Teaching Hospital and an engineering complex at the University of Uyo.

16. Reports indicate that the EFCC raid of a popular nightclub on Awolowo road, Ikoyi might negatively impact on the revenues of club operators in Lagos.

Following the raid on Thursday, heavy spenders mostly stayed away from nightclubs around Lagos at night for fear that there might be further raids. raids

Most of these clubs rely on heavy spenders, some of whom are thought to have obtained their riches via illegal means. It will be interesting to see how they bounce back from this.

17. Meanwhile, distributors of value brand whiskey, Jameson, appear to be the latest threat to Diageo’s dominance in the spirits segment of Nigeria’s alcohol market.

Since its introduction into the Nigerian market last year, the drink has found its way into several bars and restaurants and is in fact competing with the likes of Black Label, Hennessy VS and Glenfiddich.

Jameson is marketed by Pernod Ricard, one of the biggest distributors of spirits in the world. They are also the distributors of Glenlivet, Chivas Whiskey and Absolut Vodka.

This poses another threat for Guinness which has been struggling with lower margins from its beer segments. Guinness can’t afford another spirit war.

18. Diamond Bank in conjunction with Microsoft and MTN are organising what is being billed as the largest tech event in the country this year. TechFest is taking place Tuesday and Wednesday this week at the Landmark Center.

TECHFEST is an initiative from Diamond bank partnering Telecom giant MTN, VISA, NIBBS, Microsoft, Interswitch, Deloitte, and The Beat 99.9FM.

That's it for this week. Hope you found this week's episode informative.

For more on some of the information shared on this thread kindly DM me or contact @Nairametrics via our official channels.

Thanks to our sponsors @BluechipTechNG . They ensure we bring this thread to you every Sunday.

And by the way have you downloaded the @CowryWise app?

Try it out if you are looking for tech enabled way of investing your money or saving towards a project or item.

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

*End*