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Economy

Guinness Nigeria to Focus Less on Lager Brands

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Guinness Nigeria EGM

By Dipo Olowookere

**As Forex Scarcity Puts Management in Tight Corner

The second-largest brewery company in the country, Guinness Nigeria Plc, has said it will pay lesser focus on its lager brands in 2020 because of the current global health crisis caused by COVID-19.

This information was disclosed by the Finance and Strategy Director of Guinness Nigeria, Mr Stanley Njoroge, while addressing analysts, the media and others at an investor call last Friday in Lagos.

According to him, the company has taken this decision because of the issue of pricing in the sector, which is making beer makers declare losses, especially when many of them cannot increase the price of their products despite a hike in excise duty on alcohol and tobacco in the country.

The federal government, in 2018, increased the levy paid by producers of alcohol and tobacco in the country and this has made manufacturers in the industry to beg for life because they have found it very difficult to pass the cost to consumers, who have low purchasing power.

Also, beer makers have not had it good this year because of COVID-19 as the federal government, just like other governments across the globe, shut down the economy to control the spread of the virus.

The main markets of beer producers; hotels, bars and others, have still not been allowed to fully operate in most states of the federation.

At the conference last Friday, Mr Njoroge said because of these issues, especially with the pricing, Guinness Nigeria will pay more attention to its stout, spirit and malt brands this year.

“We don’t have the right price in lager,” he informed participants at the gathering.

Guinness Nigeria has two brands in the lager market; Harp Lager Beer and Dubic Extra Lager, with the former more popular among consumers. The former was introduced in 1974, while the latter in 2012.

According to Mr Njoroge, the management of Guinness Nigeria believes that its stout, spirit and malt brands have the ability to help the company cushion the impact of the COVID-19 pandemic on its operations.

Also at the analyst call, he said Guinness Nigeria Plc was presently in a tight corner because of the current foreign exchange (forex) scarcity in the country.

Nigeria, which has the largest market in Africa, has been struggling with forex inflows because the Coronavirus disease has affected its main revenue source, crude oil.

Price of the black gold went as low as $20 per barrel at the global market this year and this affected the country’s forex inflows, forcing the government to lower the crude oil benchmark in the 2020 budget twice. It was first dropped from $57 per barrel to $30 per barrel and then to $28 per barrel in the approved revised appropriation bill.

Also, the Central Bank of Nigeria (CBN) had to suspend the weekly sale of forex to currency traders at the Bureaux De Change (BDC) window in March 2020, though this was also because of a ban on foreign flights as their main customers are international air passengers. The sale is expected to resume next Monday.

In April 2020, Business Post reported that offshore investors became trapped in the country because they could not repatriate their funds as a result of forex illiquidity, which forced them to reinvest in the local debt securities and equities, which caused the boom in that period.

According to Mr Njoroge, the brewer was having sleepless nights over how to refinance its $23 million debt maturing in 2021 because of the forex issue and it is already weighing options on how to manage the debt.

“We will want to refinance it but there is no foreign currency in the market at the moment,” Mr Njoroge was quoted as saying by Bloomberg, admitting that, “Foreign exchange is a big concern for us.”

As of June, the outstanding debt of Guinness Nigeria, a subsidiary of Diageo, increased by 16 per cent to N23.2 billion ($60 million), while the finance costs rose by 74 per cent to N4.5 billion ($11.7 million) at N386/$1.

Business Post reports that as at the time of publishing this report, shares of Guinness Nigeria, which closed on Wednesday at N14 per unit, were already up by 95 kobo.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

FBN Holdings Confirms Otedola as Shareholder with 5.07% Stake

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FBN Holdings

By Dipo Olowookere

Mr Femi Otedola now controls a 5.07 per cent stake in FBN Holdings Plc, the company has confirmed.

This is coming barely 24 hours after the financial institution said it was not aware of the businessman being a major investor in the organisation.

There were reports a day earlier that the former Chairman of the defunct Forte Oil Plc was now the single largest shareholder of the firm, which owns First Bank of Nigeria Limited.

“The attention of FBN Holdings Plc has been drawn to media reports today, October 22, 2021, purporting that a certain individual has acquired a significant shareholding interest in FBN Holdings Plc, therefore, making him the majority shareholder in the company.

“As a listed company, the shares of FBN Holdings Plc are publicly traded, and sale and acquisition of shares is expected in the normal course of business. We operate in a regulated environment, which requires notification of significant shareholding by shareholders to the company, where shares are held in different vehicles, further to which the company will notify the regulators and the public as appropriate.

“The company is yet to receive any notification from the individual mentioned in the media report, of such acquisitions.

“FBN Holdings Plc will always notify the appropriate agencies and authorities whenever it receives any notice of significant shareholding by the shareholders and the company’s registrars,” the statement released by the firm on Friday had stated.

But today, the company issued another statement, informing the investing public that Mr Otedola now owns 5.07 per cent of the company’s equities. This is coming after it was reported that he acquired N30 billion worth of FBN Holdings stocks on the Nigerian Exchange (NGX) Limited.

The financial institution said it received a notification today concerning this development.

“We refer to our communication to the market dated October 22, 2021, on the above subject wherein we stated that we would inform the public of any substantial acquisition, upon receipt of notification from the shareholder.

“This morning, October 23, 2021, FBN Holdings Plc received a notification from APT Securities and Funds Limited, that their client, Mr Otedola Olufemi Peter, and his nominee, Calvados Global Services Limited, have acquired a total of 1,818,551,625 units of shares from the company’s issued share capital of 35,895,292,791.

“Based on the foregoing, the equity stake of Mr Otedola Olufemi Peter and his nominee in the company is now 5.07 per cent,” the disclosure said.

Business Post reports that with this development, Mr Otedola will likely have one of two persons on the board of FBN Holdings to represent his interest. A change in the board of directors of FBN Holdings is likely to happen in the coming days, weeks or months.

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Economy

Buhari to Finally Launch eNaira October 25

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eNaira

By Dipo Olowookere

On Monday, October 25, 2021, President Muhammadu Buhari will formally launch eNaira, the much-awaited electronic Naira, the Central Bank of Nigeria has confirmed.

The digital legal tender for the country introduced by the CBN was initially scheduled for launch on October 1, 2021, but was shelved.

According to the apex bank, the botched introduction was a result of activities clashing with the event and in order not to let other events overshadow the eNaira launch, it was postponed indefinitely.

But on Saturday, the CBN announced next Monday as the new date for the introduction of the electronic currency under the Central Bank Digital Currency (CBDC).

A statement issued by the Director of Corporate Communications, Mr Osita Nwanisobi, disclosed that Mr Buhari will perform the formal launch at the State House in Abuja.

It was stated that after the event by the President, the eNaira, which has the theme Same Naira, more possibilities, will become available to Nigerians to use as it would be activated.

The CBN said a structure has been put in place to promptly address any issue that might arise from the pilot implementation of the eNaira, with room for further engagement with “various stakeholders.”

The bank said “the eNaira is a culmination of several years of research work” in advancing the “boundaries of the payments system in order to make financial transactions easier and seamless for every strata of the society.”

According to the central bank, it had robust discussions with “the banking community, fintech operators, merchants and indeed, a cross-section of Nigerians” concerning the eNaira and said it was satisfied with the outcome of the talks, stressing that the eNaira “marks a major step forward in the evolution of money” and would ensure that the digital currency, “like the physical Naira, is accessible by everyone.”

“Given that the eNaira is a journey, the unveiling marks the first step in that journey, which will continue with a series of further modifications, capabilities and enhancements to the platforms.

“The CBN will continue to work with relevant partners to ensure a seamless process that will benefit every user, particularly those in the rural areas and the unbanked population,” it added.

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Economy

Friesland Drowns Unlisted Securities Market by 0.33%

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Friesland WAMCO

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed in the negative territory at the last trading session of the week on Friday by 0.33 per cent.

It was the first time the market was closing bearish this week and this drowning of the unlisted securities market yesterday was caused by a decline in the equity price of FrieslandCampina WAMCO Nigeria Plc. The price of Friesland went down by 6.7 per cent or N8 to settle at N120.00 per share in contrast to N128.00 per share of the last session.

As a result, the market capitalisation of the exchange dropped N2.04 billion to close the day at N617.59 billion in contrast to N619.63 billion it finished on Thursday.

In the same vein, the NASD Unlisted Security Index (NSI) depreciated by 2.47 points to wrap the session at 747.53 points compared with 750.00 points of the previous session.

Despite the loss recorded yesterday, two securities closed in the positive region led by Central Securities Clearing Systems (CSCS) Plc, which rose by N1.15 or 6.4 per cent to close at N17.95 per unit versus the previous N16.80 per unit.

Also, NASD Plc appreciated during the session by 5 kobo or 0.37 per cent to quote at N13.70 per share as against the N13.65 per share it traded at the preceding session.

At the market on Friday, a total of 292,000 units of securities were transacted by investors in contrast to the 209,300 units of securities transacted at the previous session, indicating a rise of 6.1 per cent.

Equally, the value of shares exchanged by the market participants went up by 14.7 per cent to N4.9 million from N4.3 million recorded at the previous session.

These transactions were carried out in five deals, 16.7 per cent lower than the six deals carried out at the preceding session.

Food Concepts Plc was the most active stock by volume (year-to-date) as it has traded 11.4 billion units of its shares for N14.4 billion. Lighthouse Financial Services Plc occupied the second spot as it has traded 1.1 billion valued at N546.1 million, while Geo Fluids Plc took third place with 1.0 billion units worth N700 million.

In terms of value, Food Concepts Plc also topped the chart with 11.4 million units traded for N14.4 billion, Nigerian Exchange (NGX) Group Plc remained in the second spot with 456.4 million units valued at N9.2 billion, while VFD Group Plc maintained the third spot with 10.4 million units valued at N3.5 billion.

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