Economy
Discordant Tunes over Union Bank N50b Rights Issue
By Daily Times
A new report by Daily Times Nigeria has revealed that failure by Union Bank of Nigeria (UBN) to launch a N50 billion Rights Issue in the second quarter of 2017 as it promised at its 48th Annual General Meeting (AGM) held in Lagos is due to the lack of local investor’s confidence, mistrust and decline of 20 percent free float of public share to 14.11 percent.
It is, however, worthy of note that free float is commonly known as the percentage shares of a company on the exchange held by the public for trading activities.
In a petition, which was addressed to the Senate President, Federal Republic of Nigeria, National Assembly, exclusively obtained by The Daily Times, tagged, ‘Investor’s Confidence in the Capital Market: Issue of Public Float Shares Flagrant Abuse’, stated, “We, concerned shareholders’ group deem it duty bound to brief you on latest development, that may further erode investor’s confidence in our capital market. This calls for urgent action to prevent calamity, as it is now, the current situation may eventually kill the market confidence, if not addressed drastically, soonest.”
The document was signed by the President, Renaissance Shareholders Association of Nigeria (RSAN), Mr Olufemi Timothy and the Secretary, Mr Ralph Ogedengbe, noting that investor’s confidence remains the fatal oxygen that the capital market thrives on, and if not protected and duly safeguarded, the market may die abruptly.
According to the petition, based on all these aforementioned, “We hereby seek your Excellencies’ urgent attention and action on the issue of abuse of public (free) float of shares on the Nigerian Stock Exchange (NSE).”
The local investors, in the note explained that investor’s confidence could only be sustained if the market regulators; NSE, the Securities and Exchange Commission (SEC), are very strict about its rules on disclosures and transparency. One of such rules that seem to be carelessly or not strictly enforced was the free float post-listing rule.
“On the NSE, we have observed that the compliance on the free float shares rules are treated with levity instead of ensuring strict compliance by companies, the authorities of the exchange look the other way, thus allowing this critical post-listing rule be flouted at the expense of investors. The issue of public float (Free Float) remains a potential threat to our market ability to grow and develop and investors’ confidence.
“It is obvious that an exchange that treats free float with levity, less strictness, may soon suffer, lose investors’ respect and confidence, as you will agree with us that low public float of shares on any market. creates room for manipulations, which also negatively alters the ability to buy and or sell such company’s shares (with low public float)”, it stated.
It therefore, notes that The NSE has a post-listing rule of 20 per cent free float of shares for companies on the exchange (Mandatory). “But to our chagrin and dismay, many companies have persistently violated this rule without any restriction from the exchange authorities which now serves as basis for others to follow.”
According to the petition, “the investing public remains in darkness, with fears of losing their investment, as to the reasons they permit this abuse and latest development on what the exchange was doing on this act to protect the market and investors (being aware of the danger) and why this trend has continued unabated.”
While speaking in an exclusive telephone chat with our correspondent over the weekend, Olufemi Timothy said, he is one of the people who objected to the Union Bank’s right issue since last year, because it is wrong to come for right issue at a point that so many people are at disadvantage.
In his words: “We minority shareholders are at disadvantage, because when local investors are in a recession economy, how can you say you want to do right issue? When you know that the other party will not be able to subscribe, and you want to bring your own money from foreign countries, which is cheaper now. If you bring dollar from abroad now, you can buy the whole of Nigeria, and you know there is a core investor who is a foreigner an American in Union Bank.”
He said further that the core investors have insisted that they are bringing dollar to come and buy their own right, and this is coming at a time that they know Nigeria is in recession.
He said, “No way, Nigeria minority cannot buy. I said they only want to explore the situation and buy out the minority, because this is not the appropriate time to do right issue and if you know you have that kind of money, find a way of giving it into the bank without touching the equity, equity investment is not encouraging in the present Nigeria, because the country is in recession.
“I think by now, they are also having problem in bringing the dollar; and they cannot come out and our own association has always been advocating that no foreign national, who is a major investor, should come for right issue by now, because at the end of the right issue, free float of shares would be abused.
“There is no way they will not buy more than 80 percent, on the basis, regulators should regulate well, if they are patriotic. they should not approved any right issue that abused public float of 20 percent. So, if any foreign investor wants to increase his stake, it should not be more than 80 per cent in the company.”
He said, “So, most of the foreign investors have become lawless; they know there is a law in Nigeria that says 20 percent must be free float, and the highest share you can hold is 80 percent. I don’t know what is wrong with the Union Bank that it cannot come out for it so-called right issue that is so arrogant about, even though it is good for minority investors.
“I think, Union Bank are burning their fingers now, because they cannot do right issue by now, if you have that money, you should assist the company, after all, you are the management, the chairman of the board. They must understand that there is a law in this country that says there is 20 per cent free float of shares, which every foreign investor must obey.”
According to him, “With just 14.11 percent free float of shares as against the 20 percent threshold, simply means that Union Bank is already abusing the law and still want to do right issue and the regulators are not doing anything about it”, he lamented.
But on a contrary view, National Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, told our correspondent at the weekend that after the right issue was approved by the shareholders at the bank’s last AGM, which was held barely two months ago, that the lender would still have to do some compilation and filling with SEC.
He defended the bank that may be SEC has not make the approval and that the lender is still on track, adding that it is not yet too late because the second quarter has not been exhausted.
“I belief anytime they finished with the arrangement they will come onboard, because to do a right issue of N50 billion is not easy and a lot of underground work has to be perfected”, he explained.
Responding to question on the likelihood of local investors buying into the right issue if eventually goes life, Mr Okezie, said, “The most important thing is to prepare the minds of foreign investors, who are currently the majority shareholders. Nigerians must not be left out because, they are already short-changed, because of the structure of the shares Funke Osibodu (former CEO of UBN) bided that time, given the majority to the so called investors.”
He said, “So, for Nigerians to get themselves back in the system, they have to take their rights. Failure to do so, they are given the chances for the foreign investors to mop up; and that is why it is very important for Nigerians, who are investors in the bank, to take up their rights when it is open.”
While commenting on the likelihood of the majority shareholder getting more than the regulated 80 per cent shareholding, he said, “I think, they would have that at the back of their minds that they cannot have more than 80 per cent as the core investors, because there is a regulated 20 per cent free float of share, so as to prevent from being de-listed from stock exchange.
“I don’t think Union bank wants to be delisted from stock exchange; they know their limits because Nigeria investors would not be happy, and that is why Nigerian shareholders need to be repositioned and take their shares back.”
Reacting on the delayed right issue, Head, Corporate Affairs & Corporate Communication, UBN, Ogochukwu Sylvia Ekezie, told our correspondent on the telephone at the weekend that, everything was on course.
According to her, “We are now going through the regulatory approval; and everything is with the SEC, and once the approval comes through, it will go ahead as planned.”
She said that there is an application process to the right issue; and that the bank is going through the process now, assuring that aside the approval process there is no issue.
But when pressed to comment on the bank’s current 14.11 percent free float of share as against the 20 percent required by the NSE, she said: “I’m not in position to answer that question; that is a question somebody else is in a better position to answer.
“So, if you can send me an e-mail or get back to me on Monday, but know that whatever it is that we are doing the regulators are very much aware, NSE, SEC and all the regulators are involved. We would be in compliance with whatever the regulators expect.”
According to a financial expert, Mr Teslim Shittabey, postulated that companies planning right issues that have lesser free float shareholdings are likely to succeed, because the majority shareholders would easily pick their right issues, which bulk of the offer.
In Union Bank, Atlas Mara Limited and Union Global Partners Limited, own 85.89 percent of its total shares.
However, the Chief Financial Officer of the bank, Mrs Oyinkan Adewale explained in a video message posted on Youtube that the right issue would be used to fund the bank’s growth. “We would lend part of the fund to selected group sectors of the economy,” she said.
According to her, the bank’s lending process would be very strict, ensuring that it meets risk acceptable criteria.
Union Bank, which is planning to raise N50 billion, is battling higher Non-performing loan ratio, which stood at 7.65 percent in Q1 2017 and liquidity ratio which is just 7 per cent higher than the 30 per cent regulatory minimum.
Although the lender’s gross earnings grew 24 percent to N33.8 billion during this period, its PAT declined 4 per cent to N4.5 billion.
Source: Daily Times
By Adedapo Adesanya
The chairman of the Nigeria Revenue Service (NRS), Mr Zacch Adedeji, has urged the country to broaden its export basket beyond raw materials by embracing ideas, innovation and the production of more value-added and complex products
Mr Adedeji said this during the maiden distinguished personality lecture of the Faculty of Administration, Obafemi Awolowo University (OAU), Ile-Ife, Osun State, on Thursday.
The NRS chairman, in the lecture entitled From Potential to Prosperity: Export-led Economy, revealed that Nigeria experienced stagnation in its export drive over three decades, from 1998 to 2023, and added only six new products to its export basket during that period.
He stressed the need to rethink growth through the lens of complexity by not just producing more of the same stuff, lamenting that Nigeria possesses a high-tech oil sector and a low-productivity informal sector, as well as lacking “the vibrant, labour-absorbing industrial base that serves as a bridge to higher complexity,” he said in a statement by his special adviser on Media, Dare Adekanmbi.
Mr Adedeji urged Nigeria to learn from the world by comparative studies of success and failure, such as Vietnam, Bangladesh, Indonesia, South Africa, and Brazil.
“We are not just looking at numbers in a vacuum; we are looking at the strategic choices made by nations like Vietnam, Indonesia, Bangladesh, Brazil, and South Africa over the same twenty-five-year period. While there are many ways to underperform, the path to success is remarkably consistent: it is defined by a clear strategy to build economic complexity.
“When we put these stories together, the divergence is clear. Vietnam used global trade to build a resilient, complex economy, while the others remained dependent on natural resources or a single low-tech niche.
“There are three big lessons here for us in Nigeria as we think about our roadmap. First, avoiding the resource curse is necessary, but it is not enough. You need a proactive strategy to build productive capabilities,” he stated, adding that for Nigeria, which is at an even earlier stage of development and even less diversified than these nations, the warning is stark.
“Relying solely on our natural endowments isn’t just a path to stagnation; it’s a path to regression. The global economy increasingly rewards knowledge and complexity, not just what you can dig out of the ground. If we want to move from potential to prosperity, we must stop being just a source of raw materials and start being a source of ideas, innovation, and complex products,” the taxman stated.
He added that President Bola Tinubu has already begun the difficult work of rebuilding the economy, building collective knowledge to innovate, produce, and build a resilient economy.
By Adedapo Adesanya
President Bola Tinubu on Thursday inaugurated Nigeria’s National Halal Economy Strategy to tap into the $7.7 trillion global halal market and diversify its economy.
President Tinubu, while inaugurating the strategy, called for disciplined, inclusive, and measurable action for the strategy to deliver jobs and shared prosperity across the country.
Represented by Vice-President Kashim Shettima, he described the unveiling of the strategy as a signal of Nigeria’s readiness to join the world in grabbing a huge chunk of the global halal economy already embraced by leading nations.
“As well as to clearly define the nation’s direction within the market, is expected to add an estimated $1.5 billion to the nation’s Gross Domestic Product (GDP) by 2027. It is with this sense of responsibility that I formally unveil the Nigeria National Halal Economy Strategy.
“This document is a declaration of our promise to meet global standards with Nigerian capacity and to convert opportunity into lasting economic value. What follows must be action that is disciplined, inclusive, and measurable, so that this Strategy delivers jobs, exports, and shared prosperity across our nation.
“It is going to be chaired by the supremely competent Minister of Industry, Trade and Investment.”
The president explained that the halal-compliant food exports, developing pharmaceutical and cosmetic value chains would position Nigeria as a halal-friendly tourism destination, and mobilising ethical finance at scale,” by 2030.
“The cumulative efforts “are projected to unlock over twelve billion dollars in economic value.
“While strengthening food security, deepening industrial capacity, and creating opportunities for small-and-medium-sized enterprises across our states,” he added.
Allaying concerns by those linking the halal with religious affiliation, President Tinubu pointed out that the global halal economy had since outgrown parochial interpretations.
“It is no longer defined solely by faith, but by trust, through systems that emphasise quality, traceability, safety, and ethical production. These principles resonate far beyond any single community.
“They speak to consumers, investors, and trading partners who increasingly demand certainty in how goods are produced, financed, and delivered. It is within this broader understanding that Nigeria now positions itself.”
Tinubu said many advanced Western economies had since “recognised the commercial and ethical appeal of the halal economy and have integrated it into their export and quality-assurance systems.”
President Tinubu listed developed countries, including the United Kingdom, France, Germany, the Netherlands, the United States, Canada, Australia, and New Zealand.
“They are currently among the “leading producers, certifiers, and exporters of halal food, pharmaceuticals, cosmetics, and financial products.”
He stated that what these developed nations had experienced is a confirmation of a simple truth, that “the halal economy is a global market framework rooted in standards, safety, and consumer trust, not geography or belief.”
The president explained that the Nigeria national halal economy strategy is the result of careful study and sober reflection.
He added that it was inspired by the commitment of his administration of “to diversify exports, attract foreign direct investment, and create sustainable jobs across the federation.
“It is also the product of deliberate partnership, developed with the Halal Products Development Company, a subsidiary of the Saudi Public Investment Fund.
“And Dar Al Halal Group Nigeria, with technical backing from institutions such as the Islamic Development Bank and the Arab Bank for Economic Development in Africa.”
The Minister of Industry, Trade and Investment, Mrs Jumoke Oduwole, said the inauguration of the strategy was a public-private collaboration that has involved extensive interaction with stakeholders.
Mrs Oduwole, who is the Chairperson, National Halal Strategy Committee, said that the private sector led the charge in ensuring that it is a whole-of-government and whole-of-country intervention.
The minister stressed that what the Halal strategy had done for Nigeria “is to position us among countries that export Halal-certified goods across the world.
The minister said, “We are going to leverage the African Continental Free Trade Area (AfCFTA) to ensure that we export our Halal-friendly goods to the rest of Africa and beyond to any willing markets; participation is voluntary. “
She assured that as the Chairperson, her ministry would deliver on the objectives of the strategy for the prosperity of the nation.
The Chairman of Dar Al-Halal Group Nigeria L.td, Mr Muhammadu Dikko-Ladan, explained that the Halal Product Development Company collaborated with the group in developing the strategy.
“In addition to the strategy, an export programme is underway involving the Ministry of Trade and Investment, through which Nigerian companies can be onboarded into the Saudi Arabian market and beyond.£
Mr Dikko-Ladan described the Strategy as a landmark opportunity for Nigeria, as it creates market access and attracts foreign direct investment.
By Adedapo Adesanya
GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a 100 per cent guarantee to support a $75 million debt facility for Robust International Pte Ltd (Robust) to construct a new cashew nut processing plant in Ogun State, Nigeria.
GuarantCo, under the PIDG is funded by the United Kingdom, the Netherlands, Switzerland, Australia, Sweden and Canada, mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower-income countries across Africa and Asia.
Nigeria is one of Africa’s largest cashew producers of 300,000 tonnes of raw cashew nuts annually, yet currently less than 10 per cent are processed domestically. Most raw nuts are exported unprocessed to Asian and other countries, forfeiting up to 80 per cent of their potential export value and adding exposure to foreign exchange fluctuations.
According to GuarantCo, this additional plant will more than double Robust’s existing cashew processing capacity from 100 metric tonnes per day to 220 metric tonnes per day to help reduce this structural gap.
The new plant will be of extensive benefit to the local economy, with the procurement of cashew nuts from around 10,000 primarily low-income smallholder farmers.
There is an expected increase in export revenue of up to $335 million and procurement from the local supply chain over the lifetime of the guarantee.
Furthermore, the new plant will incorporate functionality to convert waste by-products into value-added biomass and biofuel inputs to enhance the environmental impact of the transaction.
It is anticipated that up to 900 jobs will be created, with as many as 78 per cent to be held by women. Robust also has a target to gradually increase the share of procurement from women farmers, from 15 per cent to 25 per cent by 2028, as it reaches new regions in Nigeria and extends its ongoing gender-responsive outreach programme for farmers.
Terms of the deal showed that the debt facility was provided by a Symbiotics-arranged bond platform, which in turn issued notes with the benefit of the GuarantCo guarantee. These notes have been subscribed to in full by M&G Investments. The transaction was executed in record time due to the successful replication of two recent transactions in Côte d’Ivoire and Senegal, again in collaboration with M&G Investments and Symbiotics.
Speaking on the development, the British Deputy High Commissioner, Mr Jonny Baxter, said: “The UK is proud to support innovative financing that mobilises private capital into Nigeria’s productive economy through UK-backed institutions such as PIDG. By backing investment into local processing and value addition, this transaction supports jobs, exports and more resilient agricultural supply chains. Complementing this, through the UK-Nigeria Enhanced Trade and Investment Partnerships and the Developing Countries Trading Scheme, the UK is supporting Nigerian businesses to scale exports to the UK and beyond, demonstrating how UK-backed partnerships help firms grow and compete internationally.”
Mr Dave Chalila, Head of Africa and Middle East Investments at GuarantCo, said: “This transaction marks GuarantCo’s third collaboration with M&G Investments and Symbiotics, emphasising our efforts to bring replicability to everything we do so that we accelerate socio-economic development where it matters most. The transaction is consistent with PIDG’s mandate to mobilise private capital into high-impact, underfinanced sectors. In this case, crowding in institutional investors in the African agri-processing value chain.
“As with the two recent similarly structured transactions, funding is channelled through the Symbiotics institutional investor platform, with the notes externally rated by Fitch and benefiting from a rating uplift due to the GuarantCo guarantee.”
Adding his input, Mr Vishanth Narayan, Group Executive Director at Robust International Group, said: “As a global leader in agricultural commodities, Robust International remains steadfast in its commitment to building resilient, ethical and value-adding supply chains across origin and destination markets. This transaction represents an important step in advancing our long-term strategy of strengthening processing capabilities, deepening engagement with farmers and enhancing local value addition in the regions where we operate. Through sustained investment, disciplined execution and decades of operating experience, we continue to focus on delivering reliable, high-quality products while fostering inclusive and sustainable economic growth.”
For Ms María Redondo, director at M&G Investments, “The guarantee gives us the assurance to invest in hard currency, emerging market debt, while supporting Robust’s new cashew processing plant in Nigeria. It’s a clear example of how smart credit enhancement can unlock institutional capital for high-impact development and manage currency and credit risks effectively. This is another strong step in channelling institutional capital into meaningful, on‑the‑ground growth.”
Also, Ms Valeria Berzunza, Structuring & Arranging at Symbiotics, said: “We are pleased to continue our collaboration with M&G Investments, GuarantCo, and now with Robust through a transaction with a strong social and gender focus, demonstrating that well-structured products can boost commercially attractive, viable, and impactful investments.”
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