Economy
Red Star Express Seeks Funds for New Warehouses, Trucks, Others
By Adedapo Adesanya
Top courier and logistic service provider, Red Star Express Plc, has revealed that it intends to use proceeds from the sale of 336,855,291 units of the company’s shares through rights issue for expansion of its operations.
Addressing the investing public, including Business Post on Thursday at the Nigerian Stock Exchange (NSE), Red Star Express said the four major things funds from the exercise would be used for include provision of trucks; development of warehouse facilities at Lagos-Ibadan Expressway and the Murtala Muhammed International Airport in Lagos; deployment of more improved technology; working capital of the company.
The Group Managing Director of Red Star Express Plc, Mr Sola Obabori, while speaking yesterday at the company’s Facts Behind the Figures at the stock exchange, noted that the company has seen a lot of growth in the past five years, adding that measures have been put in place to ensure further development so as to create more value to shareholders.
He said, with the expected net issue proceeds of N1.3 billion from the rights issue, the company will within 18 months develop its warehouse facilities to create a better storage of its customers’ cargos and goods, purchase more trucks to improve logistics, and put in place ICT resources among others.
“We are going to develop warehouse facilities at Lagos-Ibadan Expressway and Murtala Muhammed International Airport Cargo terminal. Spaces are already jampacked and we need to expand.
“Approval has been given by the Federal Airport Authority of Nigeria (FAAN) and this will cover 54 percent of the total money and this is about N704 million and is expected to be completed in 18 months,” the GMD said.
Mr Obabori further said, “We are also developing a 9000 square kilometer space for warehouse development along Lagos-Ibadan Expressway.”
“We will be buying additional trucks to drive the logistics part of our business,” the GMD stated, noting that capital to be raise for this purpose would be N201.6 million (15 percent of the rights issue) and should be purchased under three months.
He stressed that 12 percent of the proceeds, amounting to N154.3 million, would be used for Information and Communication Technology solutions and Enterprise Resource Planning (ERP), which he said would support the firm for better decision-making methods. He said this should be within 18 months.
According to him, the remaining 19 percent (250 million of the proceeds) would then be deployed for the working capital of across board with immediate effect.
Speaking on the company’s financial performance, Mr Obabori noted that the company’s revenue has grown by 20 percent from N8.4 billion recorded in 2018 to over N10 billion in 2019.
“This occurred as a result of our consistent increase in revenue drive, through increase in customer base, innovation, and investments in assets,” he explained.
He added that the 5-year revenue overview would do well to attract investor confidence, noting that the group, “has constantly increased revenue for the 5-year period by 51 percent from N6.6 billion in 2015 to N10.0 billion in 2019.”
He further said that subsidiaries of the company, which include Red Star Logistics and Red Star Support Services Limited, have contributed between 42 percent and 48 percent in the last five years and expressed optimism that with the rights issues, the numbers will only increase.
Seeking to further boost investors’ confidence, Mr Obabori said, “The group has always maintained an upward trend in our dividend payment over the last 5 years, with the highest record of 43 Kobo in full year 2019.”
Mr Obabori added that, “When we are done with this rights issues, it will be N3.7 billion, assuming all provisionally allotted ordinary shares are fully taken up on completion of the right issues.”
The company’s market capitalization pre-issue stood at N2.36 billion. It was stated that shareholders who do not accept their allotment in full may have their shareholding in the company diluted.
Looking ahead, Red Star Express Plc has projected a revenue increase of N12.6 billion and N1.4 billion increase in Profit Before Tax and constant increases in the company that will see its revenue reach N18.9 billion in 2025.
Business Post reports that the company’s share price, as at the time of this report on Friday, was trading at N4.45 per share on the floor of the Nigerian stock exchange.
Red Star Express Plc provides a portfolio of logistics solutions which include, but not limited to International and Domestic delivery, Freight Forwarding, Information and Document Management, Mail Management, Warehousing, and E-Commerce Solutions.
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 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 297.5 million units sold for N5.3 billion.
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