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Economy

SEC Okays 120 Merger Deals in Three Years

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sec capital market

By Dipo Olowookere

About 120 merger related transactions were approved in the last three years by the Securities & Exchange Commission (SEC).

This information was revealed by the acting Director General of the apex regulatory agency in the Nigerian capital market, Ms Mary Uduk.

According to her, “We are determined to ensure that every shareholder is fairly, equitably and similarly treated and given sufficient information regarding transactions in the capital market.”

She said at an average of 40 merger related transactions every year, the nature and structure of business dealings and transactions varied in line with the objectives of the transacting entities and operational sectors.

“We had mergers by amalgamation, acquisition of assets only, acquisition of economic rights, MBOs, carve-outs, spin-offs and split-offs, amongst others,” the SEC boss explained.

The DG noted that the primary challenge with respect to merger related transactions was the determination of what transaction was modifiable.

Ms Uduk made these remarks at the first Annual Seminar of the Committee on Mergers, Acquisitions and Reorganisations of the Nigerian Bar Association (NBA) section on Business Law in Lagos on Thursday.

She disclosed that apart from categorising the transactions into small, intermediate and large mergers, the Investment & Securities Act (ISA) gives the commission the latitude to review the specified thresholds done to ensure regulation properly targeted at transactions with significant economic impact.

Ms Uduk assured that her agency will continue to give level playing field to every stakeholder in the capital market.

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

Shell to Assist Nigeria Boost Gas Usage to 5bcf/d

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Gas Flaring

By Adedapo Adesanya

Shell Petroleum Development Company of Nigeria Limited (SPDC) has restated its commitment to help grow gas usage in Nigeria to 5 billion cubic feet of gas per day (bcf/d) from its current 1.7 bcf/d by 2022.

This was disclosed by Mr Osagie Okunbor, the Managing SPDC Director and Country Chair of Shell Companies in Nigeria, while speaking at the Nigerian Gas Association’s 12th International Conference and Awards, held virtually under the theme Powering Forward: Enabling Nigeria’s Industrialization via Gas.

Mr Okunbor pledged support to the federal government’s goal of using the country’s proven gas reserves to trigger economic activities for gas-based industrialisation.

He said the multinational’s support is shown in the company’s multi-billion dollars investment in four of Nigerian National Petroleum Corporation (NNPC) aptly named Seven Critical Gas Development Projects.

According to him, Shell has invested in the Assa North gas project; four unitised gas fields; Brass Fertilizer Company; and the cluster development of Okpokunou/Tuomo West (OML 35/62) to support the government’s drive for national development.

He said, “I am very happy that NNPC and the Nigerian Content Development and Monitoring Board (NCDMB) have taken key roles in these projects. These are positive steps.”

He commended the government’s recent progress in gas development and stated support for NNPC’s aspiration to grow domestic gas usage in Nigeria to 5 billion cubic feet of gas per day from its current 1.7 billion cubic feet of gas per day by 2022.

Mr Okunbor said, “Nigeria has launched out on a few audacious and, frankly, great projects to essentially drive our ambition as a country in this regard. Let’s find a way to make sure that we stay the course and begin to put our efforts in a consistent manner towards downstream where our country can get an ultimate benefit for gas.”

He counselled for robust engagement in discussions for an agreeable price framework in order to attract investments in the country’s rich gas sector.

“A robust pricing framework would be very helpful to unlock Nigeria’s proven gas reserves, especially for Power, Agriculture and Industrial sectors,” he added.

Mr Okunbor said the current pricing regime does not quite fit the wider framework of what the gas industry does.

“We want to incentivise methanol and fertilizer production, which is extremely important, to gear up our agricultural sector but the price regime now in that sector is lower than the kind of prices that you have for supply to the power sector and industrial establishments.

“To make domestic gas work, we do need the right price regime. It might just mean that some sectors are supported more than others that can naturally carry themselves, the Petroleum Industry Bill (PIB) provides that framework.” Mr Okunbor further said.

He urged policymakers to strike a careful balance between trying to raise funds – in terms of the kind of taxes and royalties that are put on gas – and understanding that this is actually much more of a resource that drives national development.

“Gas is by far more important as a catalyst for development,” he added.

Nigeria has over 200 trillion cubic feet of gas proven and is the world’s 9th largest proven gas reserves.

Mr Okunbor added that the country can satisfy both domestic and export markets of gas if the right policies and processes are put in place and the country continues to drive those policies, processes and gas infrastructure.

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NNPC Rules Out Hike in Petrol Pump Price in March

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petrol pump price

By Modupe Gbadeyanka

Nigerians have been assured that the pump price of Premium Motor Spirit (PMS), commonly called petrol, will not be increased this month.

This assurance was given by the Nigerian National Petroleum Corporation (NNPC) via a statement signed by its Group General Manager in charge of the Group Public Affairs Division, Mr Kennie Obateru.

In the statement issued on Sunday, Mr Obateru appealed to motorists and consumers of the commodity not to panic buy or hoard the product.

There had been reports that oil marketers will increase the price of the fuel at their retail stations on the back of the recent rise in the price of crude oil in the global market.

When the downstream petroleum sector was to be partially deregulated by the federal government last year, citizens were told that prices of petrol would be determined by the international price of black gold.

As of then, the Brent crude, which Nigeria’s oil is priced, was sold around $40 per barrel, but last week, it traded at $67 per barrel, fuelling speculations that the retail price of petrol may likely go for N180.

Last week, most NNPC retail stations in Lagos, according to findings by Business Post, were selling the product at N162 per litre. A few filling stations reportedly sold for N180 per litre at the weekend in Lagos.

But NNPC, in the statement, has ruled out any increment in the ex-depot price of petrol in March 2021 because it does not want to “jeopardize ongoing engagements with organised labour and other stakeholders on an acceptable framework that will not expose the ordinary Nigerian to any hardship.”

As a result, the state-owned oil agency has warned “petroleum products marketers not to engage in an arbitrary price increase or hoarding of petrol in order not to create artificial scarcity and unnecessary hardship for Nigerians.”

According to the NNPC, it has “enough stock of petrol to keep the nation well supplied for over 40 days and urged motorists to avoid panic buying.”

The corporation also called on relevant regulatory authorities to “step up monitoring of the activities of marketers with a view to sanctioning those involved in products hoarding or arbitrary increase of pump price.”

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Economy

MTN Nigeria Makes N205bn Profit, to Pay Investors N5.90 Dividend

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MTN Nigeria AGM

By Dipo Olowookere

Africa’s leading telecommunication company, MTN Nigeria Plc, had a good year in 2020 despite the disruption caused to businesses across the globe.

In the year, according to the financial statements of the firm released to the Nigerian Stock Exchange (NSE) and analysed by Business Post, the sum of N1.4 trillion was generated in the year, higher than the N1.2 trillion achieved in 2019.

A significant part of the revenue was contributed by voice revenue, N766.4 billion versus N725.5 billion, while data revenue contributed N332.4 billion in contrast to N219.4 billion in 2019.

However, the direct network operating costs increased to N310.3 billion from N246.6 billion as a result of a rise in BTS leases to N225.6 billion from N170.1 billion, a jump in the regulatory fees to N34.8 billion from N30.3 billion and a rise in the network maintenance to N48.6 billion from N45.2 billion.

In the period under review, the telco reduced its roaming costs to N3.0 billion from N4.0 billion. It also cut is advertisements, sponsorships and sales promotions to N15.1 billion from N19.9 billion, while the other operating expenses moved higher to N66.6 billion from N51.0 billion due to the N2.0 billion expended on COVID-19, including the N1 billion donation to the Coalition Against COVID-19 (CACOVID) in April 2020 and costs of Personal Protective Equipment (PPE).

As of December 31, 2020, MTN Nigeria was left with an operating profit of N426.7 billion, higher than N393.2 billion a year earlier.

With a finance income of N15.9 billion versus N20.1 billion and N143.7 billion finance costs in contrast to N122.1 billion a year earlier, the GSM network provider was left with a profit before tax of N298.9 billion compared with N291.3 billion in 2019, while the profit after tax stood at N205.2 billion, slightly higher than N203.3 billion as at December 31, 2019, with the earnings per share closing at N10.08 as against N9.99 in 2019.

Meanwhile, the board of directors of MTN Nigeria has recommended the payment of a final dividend of N5.90 per ordinary share of 2 kobo each subject to shareholders’ approval at the forthcoming Annual General Meeting (AGM).

If the proposed final dividend is approved, the total dividend for the financial year ended December 31, 2020, will be N9.40 per share of 2 kobo each.

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Economy

CBN, NAICOM to Determine Dividend, Bonus Shares for FCMB, AIICO Shareholders

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FCMB Shareholders AGM

By Dipo Olowookere

It is almost certain that shareholders of First City Monument Bank (FCMB) and AIICO Insurance will get cash reward and bonus shares from the respective company this year for the 2020 financial year.

However, the Central Bank of Nigeria (CBN) and the National Insurance Commission (NAICOM) will have to first authorise this.

Already, the boards of FCMB and AIICO Insurance have done their parts by recommending the payment of the dividend and issuance of bonus shares, but their respective regulator will have to check their performance to see if what is being recommended is reasonable.

Last Friday, the board of FCMB held a meeting to look into the audited results of the group and after being satisfied, the payment of the dividend was recommended.

“At the board of directors meeting of FCMB group Plc held on Friday, February 26, 2021, the board approved the group’s audited financial statements for the year ended December 31, 2020, as well as payment of dividend, subject to the approval of the CBN.

“The board also considered and approved the appointment of an independent non-executive director, subject to the CBN approval.

“The retirement of Mr Peter Obaseki from the board of the company effective March 1, 2021, was also accepted by the board.

“Details of the results and the dividend payments, as well as related corporate actions, shall be made to the exchange upon obtaining approval of the CBN,” a notice signed by the company’s scribe, Mrs Olufunmilayo Adedibu, said.

On its part, AIICO Insurance said its board met on Thursday, February 25, 2021, to look into the results and the issuance of bonus stocks was recommended.

“We refer to our February 8, 2021, announcement wherein we informed the investing public and the NSE of the board meeting scheduled for February 25, 2021.

“We are pleased to inform the investing public and the exchange that the board of directors of AIICO Insurance Plc met as announced and considered and approved the group’s audited consolidated financial statements for the year ended December 31, 2020, and bonus issue subject to the approval of NAICOM and the company’s shareholders.

“The company will release the audited results to the investing public upon the approval of NAICOM.

“In view of the above, all directors, persons discharging managerial responsibility, adviser(s) of the company, or their connected persons are reminded that as announced on February 8, 2021, the closed period declared by the company is still on until 24 hours after the accounts are filed with the exchange,” its disclosure said.

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Economy

Unilever Nigeria to Conclude Unbundling of Tea Business Soon

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lipton tea unilever

By Dipo Olowookere

The unbundling of the tea business of Unilever Nigeria Plc is expected to be completed before the end of this year, the board has confirmed.

Unilever Nigeria produces the popular Lipton Tea and a few others, but this arm of the company is being proposed to operate as a standalone organisation.

In a notice to the Nigerian Stock Exchange (NSE) last week, Unilever Nigeria said the process was ongoing and at the end of it, the tea firm will operate as a separate legal entity.

Business Post recalls that in 2020, the global parent company of Unilever Nigeria announced its intention to restructure its tea arm, which is believed to generate over €3 billion annually.

It had also hinted that the new entity could be listed separately on the stock exchange, partially or totally sold to a new investor.

“You could easily see the Unilever Tea Co becoming a standalone business on a listed stock exchange with its own IPO, that is a highly likely outcome, which would have been very difficult under our old structure,” the CEO of Unilever, Mr Alan Jope, had informed Bloomberg in an interview.

In the latest update, the Nigerian subsidiary of the organisation disclosed that steps were already being taken to complete the divorce very soon.

“Further to the announcement made on August 5, 2020, about Unilever’s global announcement on the strategic review and planned separation of its tea business, this is to notify the Nigerian Stock Exchange and our esteemed shareholders of the plan to separate the Unilever Nigeria Plc tea business into a separate legal entity.

“The planned separation will go through the normal approval process and is expected to be concluded by the end of 2021.

“We shall keep the Nigerian Stock Exchange and stakeholders informed of subsequent developments on this matter,” the notice disclosed.

Share of Unilever Nigeria closed flat last Friday at the local stock exchange at N13.60 per unit. The equities dropped to that level last Monday and remained at that rate throughout the week.

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Economy

Dangote Refinery to be Ready Q1 2022, to Get Crude Oil in Naira

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Dangote Refinery returnee graduate engineers

**Gets N100bn from CBN

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has supported projects undertaken by Nigerian and Africa’s richest person, Mr Alike Dangote, with N100 billion.

The Governor of the CBN, Mr Godwin Emefiele, disclosed this on Saturday when he inspected the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos.

He explained that the intervention was to support Nigerian business. He further said that the first shipment of Urea from the Dangote Fertiliser Plant would begin in March to help boost agriculture in the country.

In addition, the nation’s chief bank disclosed that arrangements have been made to enable the Dangote Refinery to sell refined crude to Nigeria in Naira when it commences production.

The CBN Governor noted that the $15 billion projects being constructed by the Dangote Group would save Nigeria from expending about 41 per cent of its foreign exchange on the importation of petroleum products.

Mr Emefiele said, ”Based on agreement and discussions with the Nigerian National Petroleum Corporation (NNPC) and the oil companies, the Dangote Refinery can buy its crude in Naira, refine it, and produce it for Nigerians’ use in Naira.

“That is the element where foreign exchange is saved for the country becomes very clear.

“We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

“This will make the price of our petroleum products cheaper in Naira.

“If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in Naira.

“This will increase our volume in Naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele added.

The head of the banking sector regulator expressed optimism that the refinery would be completed by the first quarter of 2022, adding that this would put an end to the issue of petrol subsidy in the country.

“I am saying that by this time next year, our cost of import of petroleum products for petrochemicals or fertiliser will be able to save that which will save Nigeria’s reserve.

“It will help us so that we can begin to focus on more important items that we cannot produce in Nigeria today,” Mr Emefiele noted.

On his part, Mr Dangote said that the fertiliser and petrochemicals plants were capable of generating $2.5 billion annually while the refinery would serve Nigeria and other countries across the world.

He said the projects would create jobs for Nigerians and build their capacity in critical areas of the oil and gas industry.

Mr Dangote thanked President Muhammadu Buhari and the CBN governor for their support toward the completion of the projects.

He said: “I will like to thank the president personally for helping us and assisting us in making sure that we are now back on track.

“Mr President personally wrote a letter to the president of China and asked them to bring the expatriates that we don’t have so that we can continue work.

“During the coronavirus, you will remember that we had one or two cases when it started and everybody ran away from the site but right now we are beginning to bring people back and we have about 30,000 people now.

“The good part of it is that we have learnt a lot also and there are a lot of Nigerians that just need small training and they are doing extremely well.

”So now we only need a small number of people coming from abroad just to give that training.”

He used the opportunity to call for the speedy passage of the Petroleum Industry Bill (PIB) currently before the National Assembly to maximise the opportunities in the Nigerian oil and gas sector.

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