Economy
Nigerian Breweries to Sell N45bn Commercial Paper
By Dipo Olowookere
Leading brewery firm in the country, Nigerian Breweries Plc, has announced its intention to raise about N45 billion from the local debt market.
In a disclosure to the investing community on Friday, the company, which is struggling with the new excise duty introduced by federal government some months ago, said it wants to get the fresh capital from the sale of commercial paper.
It stated that subscription for the CP programme, coming in Series 5 and 6, will open on Monday, February 3, 2020.
Nigerian Breweries further disclosed that while the Series 5 would be for a tenor of 180 days, Series 6 would be for 270 days and both will support its short-term funding needs.
“Nigerian Breweries Plc is pleased to inform the Nigerian Stock Exchange (NSE) and the investing public of the continuation of its Commercial Paper (CP) programme with the launch of Series 5 and 6 of the programme which opens on February 3, 2020.
“While Series 5 would be for a tenor of 180 days, Series 6 would be for 270 days, and the aim is to raise up to N45 billion to support the company’s short terms funding needs,” the notice said.
The firm also said, “In addition to providing an opportunity for non-equity investors to invest in the company, the CP programme continues to support the company’s cost management initiatives with the overall aim of reducing its cost of fund. The CP also serves as an additional source of funding for the company.”
Recall that in 2019, Nigerian Breweries successfully concluded the Series 1 to 4 of its renewed N100 billion CP programme.
Business Post reports that a commercial paper is a debt instrument issued by companies to raise funds to meet their short-term obligations. The maturity is usually not beyond 270 days.
The recent decline in treasury bills and bond rates has given big corporations the opportunity to raise fresh capital at cheap interest rates unlike when rates were as high as 14 percent and above.
By Adedapo Adesanya
Dangote Petroleum Refinery will not pursue an overseas listing until it has established at least three years of proven production and financial performance, its chief executive, Mr David Bird, has said.
Mr Bird said the decision would allow the refinery to build a stronger operational track record before seeking an international listing that could support a higher valuation.
London has been mentioned as a possible destination for the refinery’s eventual foreign listing, although Mr Bird said the company would focus on its planned Nigerian initial public offering (IPO) in the near term.
The refinery is preparing for an October IPO on the Nigerian Exchange that could become Africa’s largest, with the oil firm seeking to encourage broad participation from Nigerians.
“We really want to drive participation,” Mr Bird told Reuters. “The mandate of the IPO was to be the people’s IPO.”
The refinery has submitted an application to the Securities and Exchange Commission for a potential $5 billion IPO, according to a source cited by the publication, although the final size of the offer has not been determined.
However, Mr Bird declined to comment on the proposed IPO size or the refinery’s valuation.
The company raised $2.5 billion in a private placement in July, a transaction that valued the refinery at about $40 billion. Africa Finance Corporation, which led a group of strategic investors in the deal, said the placement was 3.7 times oversubscribed.
Mr Bird said investor interest in the IPO had been strong during pre-marketing and the private placement, while preparations remained on schedule.
The refinery, owned by Mr Aliko Dangote, is also planning to double its refining capacity to 1.4 million barrels per day within three years, with the expansion expected to be funded partly through the IPO and debt.
The organisation currently supplies most of Nigeria’s gasoline and diesel demand and all of the country’s jet fuel needs.
It is also planning to establish a similar structure in Kenya to serve the East African market.
By Adedapo Adesanya
Airtel Africa Plc is considering listing its mobile payments subsidiary, Airtel Money, in US Dollars when it debuts on the London Stock Exchange (LSE) later this year, in a move that could make it one of the few companies to pursue a Dollar-denominated listing in the UK market.
According to Bloomberg, the group is evaluating whether to price Airtel Money’s shares in US Dollars rather than British Pounds Sterling to align with its reporting currency, citing people familiar with the matter.
The publication also reported that more banks have been invited to work on the deal, including lenders based in Africa and the Middle East.
The business is reportedly targeting a valuation of about $10 billion, which would make it the largest new flotation in London since July 2021, when British fintech Wise was valued at nearly £9 billion in a landmark direct listing.
Earlier this month, Mr Gopal Vittal, executive vice-chair of Bharti Airtel, said the company’s finance business has “achieved meaningful scale”, with quarterly revenue now exceeding $400 million.
He said the business has been growing by 25 per cent annually on a constant-currency basis. The opportunity remains significant, as nearly 65 per cent of adults across Airtel’s African markets still do not have access to formal bank accounts.
Airtel Money has a wide presence in Africa, including Kenya, Nigeria and Tanzania. Unlike in India, where Airtel operates its finance business as a payments bank, Airtel Money in Africa operates independently of the banking system. In Nigeria, Airtel Money operates through its licensed subsidiary known as SmartCash Payment Service Bank Limited
The service allows customers to transfer money through the mobile network, pay bills, and make international payments through virtual cards.
Airtel believes a London listing would give Airtel Money access to a broader base of investors than a listing in India or other places previously considered, including the United Arab Emirates (UAE).
Airtel Africa, which operates in 14 countries and is dual-listed in London and Lagos, is majority-owned by Indian billionaire, Mr Sunil Mittal, through Bharti Enterprises.
The company is also expanding its financial services business in India. In February, it secured a licence from the Reserve Bank of India to operate as a non-banking finance company (NBFC).
The licence allows the business to expand its operations, disburse loans, offer microcredit products and develop other financial solutions. Airtel also has access to digital data from its telecoms business, which it can use to improve its financial products.
Following the NBFC licence, Airtel announced a $2.2 billion (Rs200 billion) capitalisation plan for its finance arm.
A London listing would therefore mark a major step for Airtel Money, transforming it from a small unit within the telecoms business into a separately valued company with room to expand across Africa and India.
The UK is also strategically important to Mr Mittal, who is now the largest shareholder in British Telecom with a 24.95 per cent stake. Airtel Money’s planned listing would give the billionaire a second major footprint in the London market.
By Adedapo Adesanya
The duo of 11 Plc and Central Securities Clearing System (CSCS) Plc helped flip the NASD Over-the-Counter (OTC) Securities Exchange from a three-day losing streak to a 0.27 per cent gain on Thursday, August 13.
11 Plc, which used to be known as Mobil Nigeria, garnered N22.28 to close at N245.03 per unit compared with the preceding day’s N222.75 per unit, and CSCS Plc appreciated by N3.76 to N109.76 per share from N106.00 per share.
The gains offset the N10.00 loss recorded by FrieslandCampina Wamco Nigeria Plc, closing at N160.00 per unit compared with N170.00 per unit it finished at midweek.
When the bourse closed for the day, the market capitalisation increased by N7.31 billion to N2.727 trillion from N2.720 trillion, and the NASD Security Index (NSI) went up by 12.17 points to 4,544.20 points from 4,532.03 points.
Yesterday, the volume of securities exchanged by investors skyrocketed by 1,173.8 per cent to 1.9 million units from 150,340 units, the value of securities jumped by 1,029.5 per cent to N210.8 million from N18.7 million, and the number of deals soared by 6.3 per cent to 34 deals from 32 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 79.1 million units exchanged for N5.7 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
