Economy
Fitch Drops Seven Energy to ‘RD’
By Modupe Gbadeyanka
The Long-Term Issuer Default Rating of Nigeria-based Seven Energy International Limited has been downgraded to ‘RD’ from ‘C’ by Fitch Ratings.
This followed Seven Energy’s announcement that the 30-day grace period has expired for the cash interest payment the firm missed on its $300 million secured notes and $100 million notes due 2021.
It was gathered that the company could not meet the conditions for the interest capitalisation.
The expiration of the grace period was an event of default under the notes’ terms.
However, Seven Energy is holding talks with its creditors to agree a standstill on its debt service obligations.
The company is also discussing a comprehensive financial restructuring with its existing and potential lenders and investors.
According to Fitch, it simultaneously affirmed the wholly owned subsidiary Seven Energy Finance Limited’s $300 million 10.25 percent senior secured notes due 2021 at ‘C’ with an ‘RR6’ Recovery Rating.
All Seven Energy’s oil liftings from oil mining licences (OMLs) 4, 38 and 41 under the strategic alliance agreement (SAA) with the state-owned Nigerian Petroleum Development Company Limited (NPDC) have stopped since February 2016, as the Forcados oil pipeline and terminal remain shut due to the threat of militant attacks.
Earlier in 2017, Seven Energy announced that NPDC intends to terminate the SAA unless the company meets outstanding cash calls. Seven Energy has taken steps to preserve its contractual rights under the SAA, but there is a risk that this once key cash-generating asset will remain largely unavailable.
Near-term cash flows from the company’s gas business remain weak as sale volumes are volatile and the company’s major gas off-takers, Nigerian state-owned power stations, delay payments for consumed gas.
In April 2017, Seven Energy reported delays in finalisation and effectiveness of the World Bank partial risk guarantee (PRG), which is meant to compensate Seven Energy for up to $112 million of gas supply invoices to Calabar power station, its principal gas off-taker.
The company currently expects the PRG to be finalised soon, after approval from the Nigerian authorities is obtained and the PRG could be called 90 days after its finalisation. Finalisation of the PRG would be positive, but we do not expect it to materially improve the overall payment discipline for Seven Energy’s gas business.
Longer term, the natural gas business in Nigeria’s southeast is an important growth driver for Seven Energy, which is on track to ramp up gas sales to over 150 million cubic feet per day.
Following the completion of the power grid, local power stations including Calabar can now run at full capacity. On the other hand, power stations continue suffering from stretched liquidity and poor receivables collection, and are delaying their payments to the company.
Seven Energy’s midstream gas infrastructure assets are fully ring-fenced and serve as security for the company’s $385 million Accugas loan.
There is a risk that the Accugas lenders may decide to enforce the security on the gas assets, stripping the company of its presently main cash-generating asset and effectively forcing it into liquidation.
Seven Energy’s natural gas revenues are US-dollar pegged but are received in Naira. Nigerian companies, including Seven Energy, are facing difficulties exchanging Naira into US Dollars, which the company needs to service its US-dollar debt, at the official exchange rate.
To alleviate the problem, the company is currently negotiating with lenders to convert the Accugas facility into naira and extend its maturity. The naira convertibility issue negatively affects the company’s liquidity as long as Forcados remains shut, as the company receives little US dollar revenue from its other operations.
By Modupe Gbadeyanka
Customers of AXA Mansard in the Micro Small and Medium Scale Enterprise (MSME) sector of the economy will enjoy free exhibition stands at the Made by Nigerians Fair.
The fair is scheduled to take place on Saturday, December 7 and Sunday, December 8, 2024, at the Landmark Event Centre, Lagos.
To support small business owners, AXA Mansard is paying for stands for selected entrepreneurs to showcase their products at the fair, which attracts thousands of people.
According to the Head of Marketing at AXA Mansard Insurance Plc, Mr Olusesan Ogunyooye, this is another gesture by the company to show that MSMEs can benefit from having insurance.
He described MSMEs as the backbone of any economy, noting that they drive innovation, create jobs, and contribute significantly to national development.
“Our support for these businesses at the MBN Fair reflects the commitment to their growth and sustainability. We are passionate about helping them reach their full potential by connecting them with resources and opportunities that foster success.
“By the very nature of insurance, its benefits are in the future and they are uncertain. That has been a main source of discouragement, particularly to MSMEs. Businesses are geared to making money.
“So, when thinking about insurance, an average MSME would rather invest the money in the growth of his business first.
“The risks that businesses face are also real. There are various types of risks businesses have to contend with today; from burglary to fire, the health of employees, and so on.
“When these risks manifest, they can significantly impact a business negatively. We understand that to get MSMEs to protect themselves and the millions of jobs they create, we must help them strike a balance between growing their businesses and protecting them.
“So, we have come up with different Initiatives to help them grow their businesses. The opportunity to exhibit their products and services to thousands of visitors to the MBN Fair is another in the series of our initiatives.
“We are convinced that for insurance to grow, we need to help people and businesses see it as a strategic lever to grow their businesses, not a cost that takes away from them. If we get this right, it can’t have a massive impact on our economy because, when MSMEs thrive, the economy will prosper.
“We have experimented with this model, and we are particularly excited about the responses from our customers. It is a call for us to do more, and we are committed to Nigerian MSMEs,” Mr Ogunyooye stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.05 per cent gain on Friday, December 6 after the price of Afriland Properties Plc went up by 60 Kobo to settle for the day at N16.60 per share versus Thursday’s closing price of N16.00 per share.
Consequently, the market capitalisation of the bourse increased during the session by N520 billion to settle at N1.056 trillion, the same value it ended a day earlier, as the NASD Unlisted Security Index (NSI) went up by 1.5 points to wrap the session at 3,014.91 points compared with 3,013.41 points recorded in the previous session.
Business Post reports that yesterday, the price of Acorn Petroleum Plc depreciated at the close of business by 15 Kobo to trade at N1.54 per unit compared with the preceding day’s N1.69 per unit.
The volume of securities traded in the session by investors soared by 168.3 per cent on Friday to 199,577 units from 74,381 units, but the value of securities went down by 45.8 per cent to N1.4 million from the N2.7 million recorded a day earlier, and the number of deals grew by 20 per cent to six deals from the five deals executed in the preceding session.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 billion.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited rebounded by 0.10 per cent on Friday as almost all the key sectors closed in green when trading activities ended for the week.
The banking index appreciated by 0.73 per cent, the insurance sector gained 0.55 per cent, the energy counter improved by 0.17 per cent, and the industrial goods space jumped by 0.04 per cent, while the consumer goods sector depreciated by 0.16 per cent.
At the close of business, the All-Share Index (ASI) moved up by 96.64 points to 98,210.75 points from 98,114.11 points and the market capitalisation gained N58 billion to quote at N59.534 trillion compared with Thursday’s closing value of N59.476 trillion.
The bourse finished with 27 price advancers and 21 price decliners, representing a positive market breadth index and bullish sentiment.
Golden Guinea Breweries jumped by 9.98 per cent to N5.40, Japaul improved by 9.30 per cent to N2.35, Sunu Assurances expanded by 9.07 per cent to N5.05, Sovereign Trust Insurance rose by 7.69 per cent to 84 Kobo, and Secure Electronic Technology grew by 7.69 per cent to 70 Kobo.
On the flip side, Eterna lost 4.62 per cent to N22.70, Sterling Holdings depreciated by 4.12 per cent to N4.65, Prestige Assurance fell by 3.85 per cent to 75 Kobo, Consolidated Hallmark shrank by 3.85 per cent to N2.50, and Champion Breweries slumped by 3.50 per cent to N3.86.
Yesterday, investors bought and sold 1.0 billion equities worth N17.5 billion in 7,220 deals, in contrast to the 723.0 million equities valued at N12.8 billion transacted in 8,495 deals a day earlier, indicating a decline in the number of deals by 15.01 per cent and a surge in the trading volume and value by 43.98 per cent and 36.72 per cent, respectively.
On top of the activity chart on Friday was Wema Bank with the sale of 472.5 million stocks valued at N4.1 billion, Fidelity Bank traded 251.5 million shares worth N4.0 billion, FCMB transacted 45.0 million equities for N404.9 million, UBA sold 42.3 million shares valued at N1.4 billion, and Japaul traded 20.7 million stocks worth N46.3 million.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking6 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN