Archives November 2016

Nipco to Pay N91.8bn for 60% Stake in Mobil Oil Nigeria

Mobil Oil Nigeria Plc yesterday said Nipco Plc will pay $301 million (about N91.805 billion) for the acquisition of the 60 per cent shares of ExxonMobil in the company.

Nipco, an indigenous Nigerian downstream oil and gas company, had executed a Sales and Purchase Agreement with ExxonMobil on Monday 17th October, 2016 for the acquisition of the 216,357,157 shares. But the financial consideration was not disclosed. However, the Chairman/Managing Director of Mobil Oil Nigeria, Adetunji Oyebanji said in a notification to the NSE, made available yesterday that Nipco is acquiring those shares for a consideration of $301 million subject to price adjustments for dividends and other factors.

The shares of Mobil Oil rose by 10.2 per cent yesterday to close at N241.89. Considering the market capitalisation of the N87 billion, which is the value of all the listed shares of the company at current market price, Nipco is acquiring the 60 per cent at a very high premium.
The Managing Director of Nipco, Mr. Venkataraman Venkatapathy had said the company considered this acquisition an important synergy.

“It is part of our strategic move to support Nipco’s continuous growth and expansion of its Nigerian retail footprint. We are confident of adding tremendous value to Mobil Oil Nigeria and likewise Mobil Oil will add a huge value to Nipco. In furtherance of this value addition, Nipco will continue to maintain the Mobil brand on its retail outlets as well as continue to blend and sell the Mobil brand of lubricants under Branding Licence(s) from ExxonMobil,” he said.

According to him, Mobil Oil will continue to run as a separate, distinct and independent company ,from Nipco Plc, each with its own CEO who will report to its board of directors .

“In furtherance of this transition, Mobil Oil will continue to maintain the Mobil brand at its retail outlets as well as blending and selling Mobil brand of lubricants under branding licensee [s] from ExxonMobil. In essence Mobil Oil will continue as usual and therefore the change should be smooth and seamless,” he added.

Venkatapathy expressed profound gratitude and appreciation of Nipco to ExxonMobil for selecting the company as the preferred bidder for the acquisition of the shares.

We wish to give every assurance to ExxonMobil that having entrusted us with this invaluable asset (Mobil Oil), we will ensure full brand compliance with ExxonMobil’s global standards as well as rigorously sustain and follow ExxonMobil’s code of conduct/ethos and operational excellence,” he said.

Source:© Copyright Thisday Online

FCMB posts N14.2b profit in Q3, achieves growth in retail segment

FCMB Group Plc has posted a profit before tax (PBT) of N14.2 billion for the nine-months, ended September 30, 2016.

This figure, according to the bank, represents 453 per cent rise from N2.563 billion recorded in the comparative period of 2015.

The bank’s gross revenue stood at N140.7 billion, a 29 per cent rise when compared to N109.3 billion achieved during the same period in 2015.

FCMB Group Plc, a holding firm with First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited as subsidiaries attributed the improved performance partially to its soundness of ratios and steady buffers against the subsisting adverse operating environment.
“In addition to the bank’s sustained revenue momentum combined with its cost optimisation programme.”

The Group also recorded non-interest income of N44.8 billion which is an increase of 128 per cent year-on-year, from N19.6 billion recorded in 2015. This increase has been predicated on a 612 per cent year on year increase in FX income, from N5.0 billion for the nine-months ended September 2015, to N35.3 billion for the nine-months ended September 2016.

The Managing Director of FCMB Group Plc, Peter Obaseki explained that the performance reflects its focus on key ratios and the need to maintain buffers against a sustained adverse operating environment.

According to him, capital adequacy and liquidity ratios stood at 17.6 per cent and 36.8 per cent, respectively while profit before tax rose to N14.2 billion, representing 453 per cent growth. This, the bank said, translated to an EPS of 87 kobo, up 30.6 per cent.

Meanwhile, FCMB Limited, the flagship of FCMB Group Plc, had successfully transformed to a retail and commercial banking-led group.
“First City Monument Bank (FCMB) Limited, the flagship of FCMB Group Plc with subsidiaries that are market leaders in their respective segments had successfully transformed to a retail and commercial banking-led group.

Source:© Copyright Guardian Online

Dangote to invest $3b in energy sector

Chief Strategy Officer, Dangote Group, Dr. Abdul Muktar has disclosed the group’s intention to embark on $3 billion project for a 540-kilometre pipeline from Niger Delta to the Lekki free trade zone in Lagos.

Muktar, who disclosed this at the annual roundtable session of the Lagos Chamber of Commerce and Industry’s (LCCI) Power Sector Group said, the project, which would come on board by the first quarter of 2019 aims at transporting three billion cubic metres of gas per day.

He further noted that to address the issue of pipeline vandalism, which is the major challenge faced by the energy sector, the pipelines would be offshore.

According to him, the relevance of gas power cannot be over emphasized, as lack of it can cascade into manufacturing issues and subsequent national economic concerns.
Muktar, who described the project as a game changer in the industry, advanced that apart from the scarcity of forex in recent times, power has primarily been the major challenge faced by the manufacturing sector. “And the problem we also have in the power sector is unavailability of gas.”

The Dangote strategy officer cited that only 25 per cent of the 250 million cubic feet of gas needed to run the Dangote cement plant per day is available, “this has made the company resort to coal and is not too environmental friendly.”

The project he said is necessary at this time because the jittery nature of the nation’s economy with another negative Gross Domestic Product (GDP) of -2.24 per cent recently released by the National Bureau of Statistics makes it three quarters of negative growth, which is disheartening.

He added that such growth had only been recorded in the country 29 years ago and that makes it critical.

The oil sector, he remarked shrunk by 22.1 per cent and for Nigeria to recover from the recession, the need to focus on manufacturing is paramount.

Reacting to Muktar’s revelation was the publisher of Africa oil and Gas Report, Toyin Akinosho, who noted that Dangote’s timeline of 2019 for the project is unrealistic, “though the pipeline construction is realistic with them, but not likely in 2019, perhaps in 2021 0r 2022, because they have not taken final investment decision, but Dangote people would not like to say that, and more so they do not have a guaranteed gas supply for the three billion cubic feet per day.”

Source:© Copyright Guardian Online

Fitch: Nigerian Oil Sector Suffering from Security, Regulation, Weak Infrastructure

Global rating agency, Fitch Ratings has said that the Nigerian oil and gas sector continues to suffer from security issues and weak oil prices that drag down the ratings of indigenous companies in the sector.
The agency stated this in a new presentation released monday.

It noted that significant oil oversupply and increase in oil inventories contributed to the collapse in the global oil prices since the second half of 2014, pointing out that the 14-member OPEC, of which Nigeria is a member, was partially responsible for the supply glut.

Global oil supply reached nearly 98 million barrels of oil per day (mmbopd) in October 2016, up 0.8mmbopd on September 2016, due to a record OPEC output of 33.8mmbopd, according to the International Energy Agency.

Oil & gas companies responded by cutting upstream capex, which was expected to drop by over 40 per cent in 2016 on 2014. Companies are adapting to the USD50/bbl environment by improving efficiencies of existing operations and developing new resources in regions where infrastructure already exists.
According to Fitch Rating, the breakeven prices for some new projects have been cut dramatically on cost optimisation.

Crude inventories could continue going up in 2017 unless OPEC agrees to cap production at its Vienna meeting at the end of November 2016. Although OPEC had preliminarily agreed to cut production to 32.5mmbopd-33mmbopd, tensions between Saudi Arabia and Iran threaten to derail the alliance, sending prices down.

“Nigeria remains Africa’s largest oil producer, but its production has dropped by 25 per cent in 2016 due to security issues and the closure of a number of export pipelines. Nigeria has a healthy proved reserve life of 43 years, but its future oil production will be driven by the resolution of security issues and infrastructure constrains.

“We view positively Nigeria’s recent ‘Seven Big Wins’ programme, which covers sector regulation, upstream and downstream projects, security, as well as transparency and corporate governance. The list of proposals includes disclosing fiscal rules and contract terms, promoting energy affordability and constructing another Nigeria LNG train. “Another welcome sign is Nigeria’s reported $5billion settlement with western oil majors to cover their exploration and production costs since 2010. On the other hand, the long-overdue Petroleum Industry Bill, a cornerstone of President Buhari’s oil sector reform, is still far from final, and the recent rebel activity in the Niger Delta region is only delaying the bill’s passing.

“Proposed de-consolidation and partial privation of the Nigerian National Petroleum Company would likely promote investment and hence benefit the country’s oil sector. We also remain sceptical that the multi-billion crude-for-loans prepayment deals with India and China will achieve the announced targets.

“Furthermore, Nigeria’s dependence on oil product imports and the low use of natural gas hamper its oil & gas sector. Without developing domestic refining and natural gas capabilities, Nigerian oil and gas companies remain exposed to oil price fluctuations, thus capping their ratings,” Fitch added.

Source:© Copyright Thisday Online

Qatar National Bank Converts Preference Shares to Ordinary Shares in ETI

Qatar National Bank, one of Ecobank Transnational Incorporated (ETI)’s major shareholders, with 732,277,056 preference shares, is among the shareholders of the company who want to convert their preference shares into ordinary shares. In all, holders of 819,424,548 preference shares have indicated to intention to exercise their convention option out of an outstanding of 1,031,515,911 preference shares, as at the end of December 2015.

In a notification to the Nigerian Stock Exchange (NSE) yesterday, ETI said by a resolution passed on the 14th of September 2011, the ETI Board of Directors approved the acquisition of Oceanic Bank International Plc.

“In line with the terms on conversion of preference shares recommended to Oceanic shareholders by the Oceanic board, as stated in the scheme of arrangement documents, and approved by Oceanic shareholders, preference shareholders had the right, exercisable at any time between the third anniversary of the issue date and the fifth anniversary of this date, to convert their preference shares into ordinary shares in the company at the rate of one preference share to 0.76923 ordinary share.

“Preference shareholders, therefore, had the right to convert their preference shares up to Monday the 31st of October, 2016. Out of an outstanding of 1,031,515,911 preference shares, as at the end of December 2015, the holders of 819,424,548 preference shares exercised their right to convert their preference shares into ordinary shares in the company,” the company said.

Commenting on the development, the Group Chief Executive Officer of ETI, Mr. Ade Ayeyemi said: “We appreciate the trust and confidence that the preference shareholders, particularly QNB, have in Ecobank. With the support of all our shareholders, we shall continue to provide the best quality banking services to our numerous clients across the largest banking network in Africa.”

He said the total ETI shares will increase to 24,730,354,443 ordinary shares upon conversion, noting that the company is taking all necessary steps to get the shares converted, issued and listed on the three stock exchanges on which the company is listed.

Meanwhile, trading at the stock market resumed for the week on bearish notes as the NSE All-Share Index fell by 0.06 per cent to close at 25,318.41. Similarly, market capitalisation shed N5.2 billion to close at N8.7 trillion.

Source:© Copyright Thisday Online

NDIC tasks mortgage banks on premium payment

The Managing Director, Nigeria Deposit Insurance Corporation, Alhaji Umaru Ibrahim, has appealed to the management of the primary mortgage banks to ensure that their premium contributions are paid promptly and regularly.

He said this was necessary because records had shown that 15 out 42 PMBs had yet to meet their premium obligations.

Ibrahim said this while delivering a keynote address at the NDIC’s 2016 sensitisation workshop for operators of the PMBs in Lagos.

The workshop had its theme as “Implementing Differential Premium Assessment System in Primary Mortgage Banks in Nigeria.”

The NDIC boss explained that the agency, as a risk minimiser, had obtained the approval of the Minister of Finance, Mrs, Kemi Adeosun, in August 2016 to deploy the DPAS in computing the deposit insurance premium of the PMBs as a way of encouraging market discipline.

He said, “The DPAS classifies banks into various risk buckets and applies different premium rates depending on the perceived riskiness of each risk bucket. The computation trajectory incorporates sound strategic planning and transformative business model.

“It also implicitly addresses the issue of moral hazard, which guarantees caution and avoidance of excessive risk taking in the interest of both operators and subscribers.”

While assuring the operators that the risk-based premium system-DPAS-allows the institution to pay much less premium than would have been the case with alternative flat rate system, Ibrahim said the NDIC would continue to review the deposit insurance coverage from time to time.

Source:© Copyright Punch Online

Ecobank converts 819.4 million preference shares to equities

Holders of 819,424,548 preference shares in Ecobank Transnational Incorporated have indicated their intention to convert the shares into ordinary shares (equities).

ETI, the parent company of the Ecobank Group, disclosed this on Monday in separate letters to the three stock exchanges on which ETI is listed – the Nigerian Stock Exchange, the Ghana Stock Exchange and the West African Stock Exchange.

Once the requisite approvals are obtained, the preference shares would result in 630,325,909 ETI ordinary shares at an implied conversion price of N21.32 per new ordinary share, it said.

By a resolution passed on September 14, 2011, the ETI Board of Directors approved the acquisition of Oceanic Bank International Plc.

In line with the terms on conversion of preference shares recommended to Oceanic shareholders by the Oceanic board, as stated in the scheme of arrangement documents, and approved by Oceanic shareholders, preference shareholders had the right, exercisable at any time between the third anniversary of the issue date and the fifth anniversary of this date, to convert their preference shares into ordinary shares in the company at the rate of one preference share to 0.76923 ordinary share.

Preference shareholders, therefore, had the right to convert their preference shares up to October 31, 2016.

Out of an outstanding of 1,031,515,911 preference shares, as of the end of December 2015, the holders of 819,424,548 such shares exercised their right to convert the shares into ordinary shares in the company.

Qatar National Bank, one of ETI’s major shareholders, with 732,277,056 preference shares, was among the holders that exercised their conversion option.

Source:© Copyright Punch Online

NCC: Telecoms Sector Added N1.4tn to GDP in Q3

The Nigerian Communications Commission (NCC) yesterday said the telecommunications sector, contributed N1.398 trillion, or 1.11 per cent in the real terms to the Gross Domestic Product (GDP) in the third quarter of 2016.

In a statement signed by NCC’s Director of Public Affairs, Mr. Tony Ojobo, which was made available to the media in Abuja, he said the sector’s contribution to the GDP was released by the National Bureau of Statistics (NBS).

Ojobo said the third quarter figure was slightly lower than the N1.5 trillion recorded in second quarter of 2016, adding that the figures however reflected the sign of the times.

The statement read: “The GDP for telecommunication as at Q3 of 2016 under information and communication contracted 0.95 per cent in Q3 2016 from 1.49 per cent in Q2 2016 and 4.69 per cent in Q3 2015.

“The information and communication sector contributed 9.9 per cent to total nominal GDP in third quarter of 2016, which is the same rate as recorded in the same quarter of 2015, but lower than the 12.6 per cent it contributed in the preceding quarter.

“The sector grew by 1.11 per cent in real terms, year-on-year in the Q3 of 2016 from the recorded rate in the period of 2015, which was 4.16 per cent point lower and also lower by 0.25 per cent points when compared with the rate recorded in the second quarter of 2016.”

According to the statement, further breakdown of the GDP constant basic prices for information and communication under the telecommunications and information service as at Q1 of 2015 is N1.3 trillion and Q2 of 2015 is N1.5 trillion and Q3 of 2015 is N1.3 trillion and Q4 of 2015 is N1.6 trillion which translated to N5.9 trillion for 2015.

The statement added: “Mobile telephone subscription increased from 149million in quarter 2 of 2016 to 153million as at September, 2016 (Q3) and teledensity now is 109 per cent.”

The five big players in the sector according to the statement included, Airtel Nigeria Limited, Etisalat Nigeria, Globacom Nigeria Limited, MTN Nigeria Communications Limited and NATCOM Consortium trading as ntel.

“Fixed/fixed wireless operators include IPNX, 21st Century Nigeria Limited, Glo Wired and MTN Wired in that order who have contributed to the growth of the sector meaningfully. There is a new entrant, Smile Communications providing voice over internet protocol services among others.” it said.

NCC, said Mobile Network Operators (MNOs) control about 99 per cent market share while 0.2 per cent is reserved for other operators. Internet subscriptions rose from 31.1million in 2012 to 93.6million as at September, 2016 representing about 200 per cent growth rate.

The statement revealed: “In terms of market shares by GSM operators or (MNOs), MTN controls about 40 per cent of the market with 60.5million active subscribers base.

“Globacom has 36.9million subscribers while Airtel and Etisalat have 32.7million and 22.5million subscribers respectively.

“With anticipated new investments in the areas of broadband Infrastructure in the next few months, the sector which already has about $68 billion total investments so far is likely to add more to the national GDP.”

Source:© Copyright Thisday Online

Lafarge Africa launches sustainability report

The company unveiled the 2015 Sustainability Report at the grand finale of the third edition of the Lafarge Africa National Literacy Competition in Lagos.

The Chairman, Lafarge Africa Plc, Mr. Mobolaji Balogun, said sustainability was a key part of the company’s corporate strategy, both at the group level and in Nigeria.

According to him, Lafarge’s sustainability development strategy, also known as the 2030 Plan, remains the company’s internal roadmap on how it intends to play its own part in addressing the planet’s biggest issues as the company has the opportunity and responsibility to make a positive difference.

He said, “The Sustainability Report is, therefore, part of our methodology of increasing our level of transparency in sharing our sustainable development performance with our stakeholders.

“It is a voluntary disclosure beyond listing requirements. The report reiterates Lafarge’s commitment to promoting best practices and engaging with the company’s internal and external stakeholders.”

The Managing Director, Lafarge Africa, Mr. Michel Puchercos, said the company was driven by the ambition to set new standards and help transform the way the industry works.

He added that the report would help the company to review, prioritise and take key decisions for improving its sustainability efforts.

Source:© Copyright Punch Online

Onyema Restates NSE’s Commitment to Promotion of Financial Literacy

The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, yesterday restated the exchange’s commitment to the promotion of financial literacy, saying NSE has implemented and supported a number of programmes in line with the National Financial Literacy Framework (NFLF), which contribute to raising the level of financial literacy in Nigeria.

Onyema stated this at the 2016 NSE Essay Competition Award ceremony in Lagos, disclosing that “to date, we have executed over 200 free capacity building workshops, aimed at enhancing investor understanding of the basics of investing.”

He said: “The multiplier effect of these workshops is phenomenal as approximately 16,000 retail investors from the grassroots can now make better investment decisions. Improving financial literacy is at the core of what we do at the NSE because we recognise that the ability to make well-informed financial decisions plays an important part in the capacity of individuals to manage financial matters well, a factor that can have either a negative or positive ripple effect on the economy. I am proud to say that with the NSE Essay Competition, we have established a strong foundation for improving the financial literacy and capability of Nigerians.”

According to him, through this competition, the NSE has been able to promote financial literacy among young Nigerians by encouraging them to learn how good financial decisions can better their lives now and in the future, and ultimately grow the economy.

“We have been able to inspire over 37,000 young people in more than 7,000 schools across Nigeria to learn how good financial decisions can better their lives now and in the future, and ultimately grow the economy,” he said.

At the award ceremony, Miss Ifeoluwa Toluwanimi Abiodun, a 14-year old student of Babington Macauley Junior Seminary, Ikorodu, Lagos State, emerged the winner of the 2016 edition of the NSE Essay Competition for Senior Secondary Schools students in Nigeria. Ifeoluwa clinched the first position ahead of over 7,400 participants across the country, winning N500,000 in scholarship fund for university education, N250,000 worth of equity investment and a laptop. Her school was also rewarded with three desktop computers and a printer.
Udeaja Nneoma of Sacred Hearts College, Apapa, Lagos and Gbenjo Olasubomi Victoria of Good Shepherd Schools, Meiran, Lagos emerged first and second runner-ups respectively.

Source:© Copyright Thisday Online