Author: The Nation

Securities and Exchange Commission (SEC) has stated its readiness to partner the Nigerian Agricultural Insurance Corporation (NAIC) to further deepen the commodities trading ecosystem.

Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda stated this during a meeting with the management of NAIC in Abuja at the weekend.

Yuguda stated that the commission is committed to developing the commodities ecosystem as a potent way forward in Nigeria’s quest for sustainable foreign exchange earnings and economic development.

According to him, “In the past few months, this has been exacerbated by low oil production and oil theft in the country. This has often resulted in foreign exchange shortages and balance-of-payment problems’’.

He said the Commission as part of its implementation of the 10-year Capital Market Master Plan, constituted a technical committee on commodities trading ecosystem whose mandate was to identify challenges of the framework and develop a roadmap for a vibrant ecosystem.

“A committee comprising of various stakeholders including the SON was set up to drive the implementation of the report. One of the recommendations in the report identified the development of grading and standardisation system in line with international best practice. We are therefore willing to also work with NAIC to grow the commodities sector.”

Yuguda stated that the SEC and NAIC have a lot of things in common as both organisations are government agencies working towards the growth of the commodities sector of the economy.

According to Yuguda, “The SEC has been doing a lot of things in the commodities sector and the role of NAIC in this sector cannot be over emphasised and based on that, we would like to explore areas of collaboration to see how far we can help grow that sector together’’.

The SEC DG said there are markets that need these commodities that are produced in Nigeria but lamented that the only impediment at the moment is lack of standards which he stated, is the reason some of the commodities are not being accepted in the international market.

He assured that the SEC is working hard to ensure that agricultural produce meet international specifications for export hence the need to also work with NAIC in a bid to be able to mitigate various risks in the ecosystem when they happen adding, “This sector is key to our country’s future. If we can harness it, it will greatly improve the economy of this country.

Also speaking, Executive Commissioner Operations of the SEC, Mr. Dayo Obisan said enormous opportunities abound in the entire agricultural value chain, that if well harnessed would lead to further development of the nation’s economy.

“There has been a couple of developments in the commodities side, the entire value chain is quite large. The farmers want someone to take up the crops, even local companies in Nigeria can do that. They need quality seeds as well as the funds to buy them. If the sector is not de risked, it will be difficult to attract investors.

There are a lot of things we can do together and we are looking forward to this partnership with you” He added.

In her remarks, Managing Director of NAIC Mrs Folashade Joseph, stated that her organisation is willing and available to push forward any initiative that will add value to the population and the nation’s economy.

“It is a privilege to do this, as things begin to evolve, we try to push forward what will add value to the population. Our focus is on commodities. There are various evolving issues during the course of our business as insurers because we manage across the value chain”.

The NAIC MD added that in areas of storage and insurance issues, the collaboration will be of great benefit to all parties involved and assured that NAIC is ready to provide their expertise in anything that will add value to the commodities ecosystem.

Ellah Lakes plans to raise about N2.9 billion from its shareholders as the agricultural company seeks to strengthen its balance sheet to support new business developments.

In a regulatory filing at the weekend, Ellah Lakes stated that it plans to issue 1.0 billion ordinary shares of 50 kobo each to existing shareholders at N2.90 per share.

The N2.9b rights issue will be pre-allotted on the basis of one new share for every two shares held as at the close of business on Friday, February 10, 2023.

The Nigerian Exchange (NGX) confirmed that it has received application from Ellah Lakes seeking approval for the N2.9 billion rights and subsequent listing of the rights issue after completion.

Ellah Lakes has signed many agreements in recent period for major projects that are expected to form the backbone of the company’s business diversification drive.

It had reached agreement to build a 600-tons sugar refinery in collaboration with Montserrado Investment Ltd. The sugar processing facility is expected to run on 100 per cent renewable power.

Ellah Lakes had earlier reached agreement with Ondo State on the development of a palm oil and cassava farm, covering about 5,000 hectares. Both partners would jointly develop and manage the farm for the cultivation of oil palm and cassava in Ondo state.

Ellah Lakes had in August 2020 entered into exclusive discussions to acquire the entire issued capital of an oil palm processing company with substantial assets in Delta State.

Chief Executive Officer, Ellah Lakes Plc, Chuka Mordi said the refinery agreement was a significant landmark for the company in fulfilling its strategic objective of diversifying its portfolio and production base.

“We are very pleased at this collaboration and look forward to a mutually beneficial, valuable and fruitful venture,” Mordi said.

He noted that the new sugar plant aligns with the National Sugar Master Plan (NSMP) being championed by the National Sugar Development Council (NSDC), which is geared towards accelerating the development and growth of the local sugar industry to achieve national self-sufficiency.

Ellah Lakes was incorporated on July 2, 1980 and was listed on the Nigerian Exchange (NGX) on January 14, 1993.

Originally a fish-farming company, Ellah Lakes had recently embarked on a comprehensive restructuring and diversification of its businesses. In 2019, it acquired Telluria in order to diversify its product offerings in the agribusiness sector.

Ellah Lakes acquired 100 per cent equity stake in Telluria with effect from May 7, 2019. Having complied with all the necessary regulatory requirements, the acquisition was approved by the NSE and Securities and Exchange Commission (SEC).

Mordi has said ongoing restructuring would make Ellah Lakes to attain profitability and further foster its vision of being the leading supplier of sustainable edible oil and starch to the consumer goods sector in Nigeria.

He noted that prior to 2019, Ellah Lakes was an insolvent entity but Telluria Ltd completed a reverse acquisition of the company, recapitalising the balance sheet and repositioning the business for growth with a new board and management team.

“Today, we are undergoing a restructuring exercise, which will return the business to profitability and reposition it as a leading agribusiness player across West Africa. From a corporate governance point of view, we hold ourselves to high standards of governance as expected by our shareholders and regulator, and as is befitting of our vision to become the leading supplier of sustainable edible oils and starch to the FMCG Industry in Nigeria, particularly, and West Africa, in general,” Mordi said

Nigeria’s largest food company, Flour Mills of Nigeria Plc, plans to raise up to N40 billion in new debt capital to bolster its working capital and further diversify its balance sheet.

Preliminary documents obtained at the weekend indicated that Flour Mills is concluding arrangements to launch a N40 billion commercial paper issuance, being the first two tranches of its N200 billion commercial paper (CP) issuance programme.

 The net proceeds of Series 1 and 2 CPs would be used to “support its short-term funding requirements, as part of its working capital management strategy”, according to the documents.

Shareholders of Flour Mills had approved major restructuring and capital injection programmes for the group.

The massive restructuring could lead to unbundling of the component businesses and assets of one of the largest conglomerates.

Shareholders gave approval to the group to raise up to N200 billion in additional capital in support of its growth plan and the massive restructuring programme.

FMN’s finance costs had jumped by 79.12 per cent to N8.150 billion in 2022 from N4.55 billion in 2021; contributing to the marginal increase in profitability recorded during the period.

The board of directors of group affirmed that it had received shareholders’ approval to undertake certain restructuring of the group’s businesses and to raise additional new capital.

The approvals enable the group to remove or separate all its manufacturing businesses as well as all the power assets of the company.

While the structure of the emergent company post-unbundling is still sketchy, market analysts said FMN may adopt a holding company structure, which allows the company to optimise the potential of each segment of its businesses and assets and reduce substantially the risks of grouped liabilities.

Incorporated in 1960, FMN is a vast food and agro-allied company with operations in flour milling; production of pasta, noodles, edible oil and refined sugar; production of livestock feeds; farming and other agro-allied activities; distribution and sale of fertiliser; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials; operation of Terminals A and B at the Apapa Port; customs clearing, development of real estate properties for rental, forwarding and shipping agents and logistics.

Flour Mills had recently acquired 71.69 per cent stake in Honeywell Flour Mills (HFM) at a total enterprise value of N80 billion. HFM is a separate quoted entity on the Nigerian Exchange (NGX).

FMN’s turnover had hit the N1 trillion mark in the immediate past year ended March 31 2022. The audited report showed that group turnover rose by 51 per cent from N772 billion in 2021 to N1.16 trillion in 2022. Gross profit stood at N108 billion as against N106 billion in the previous year. Profit after tax was almost flat at N7.328 billion in 2022 as against N7.261 billion in 2021.