The Nation Newspaper

Category: Equities

  • ‘Nigeria can generate N5tr yearly from solid minerals’

    •Metal exporters seek to partner with govt

    Nigeria can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits, with several multiplier effects on job creations, state development and social infrastructure that could make the solid minerals sector as the main catalyst for the national development.

    At a press briefing at the weekend in Lagos, the Association of Metal Exporters of Nigeria called on the Federal Government to provide the enabling environment for the development of the Nigerian solid minerals sector. Metallic solid minerals are the most exported solid minerals from Nigeria.

    The association, which comprises of various companies in the business of metal export, praised the focus of the Honourable Minister of Solid Minerals, Mr. Kayode Fayemi, and expressed its readiness to partner with the government in the development of the Nigerian solid minerals sector.

    President, Association of Metal Exporters of Nigeria, Mr. Seun Olatunji, said there is need for synergy between government agencies and private operators to unlock the values in solid minerals sector.

    He noted that with not less than 38 viable solid mineral deposits in sustainable export quantity in Nigeria, the solid minerals sector has the potential to generate not less than N5 trillion annually once the government put in place necessary frameworks.

    He pointed out that the solid minerals industry could serve as the much-needed solution to unemployment as the development of the value chain from mining to export can create more than five million jobs.

    “We are glad that the current government is serious about solid minerals and diversification of the economy.Government should come up with policies that will enable Nigerians to benefit optimally from the country natural resources,” Olatunji said.

    According to him, there is need for government regulatory agencies such as Standards Organisation of Nigeria (ON) to work with established private sector companies under the auspices of Association of Metal Exporters of Nigeria to develop globally acceptable regulatory standards for Nigerian metallic exports.

    He noted that Nigeria has been losing considerable values due to the absence of efficient regulations and standards for metal exports.

    “Our vision is to have a solid minerals industry where all operators along the value chain are well compensated and where Nigeria can realise the full potential of its God-given natural resources,” Olatunji said.

    Vice President, Association of Metal Exporters of Nigeria, Mr. Bamidele Ayemibo, underscored the need for government to consider viable public private partnership (PPP) option to develop basic infrastructure such as crushing plant and standardised weighing bay among others.

    According to him, with a crushing plant, government should put in place a general policy that ensures that all metal exports are crushed and SON and other regulatory agencies should see to the enforcement of standards in the solid minerals exports in order to ensure that Nigerian exports are competitive in the global market.

    General Secretary, Association of Metal Exporters of Nigeria, Mrs Kemi Ayo-Ogunkeye, added that standard-setting will bring values to Nigerian businesses and Nigeria as this will not only enhance the volume of transactions but also the reliability of the business.

    She said the Association of Metal Exporters of Nigeria is willing to support government efforts in developing the solid minerals exports noting that members of the association as established operators have the wherewithal to contribute meaningfully to the government’s efforts at developing the sector.

    In his remarks, financial secretary, Association of Metal Exporters of Nigeria, Mr. Adegbola Ilori, said the association would also interface with the National Assembly to seek review of existing laws and to promote new laws that could help the development of the solid minerals industry.

    He praised the policy initiative aimed at encouraging state governments to play actively in the development of solid minerals in their domains, noting that such a policy could be a major solution to the cash crunch bedeviling many states and help to stop rural-urban drift.

  • AMCON divests from Wema Bank, transfers shares to new investor

    AMCON divests from Wema Bank, transfers shares to new investor

    The Asset Management Corporation of Nigeria (AMCON) has sold its equity stake in Wema Bank Plc.

    Sources in the know told The Nation at the weekend that the divested shares were part of the large volumes of shares recorded by the bank at the Nigerian Stock Exchange (NSE) in the last two trading sessions.

    A regulatory source confirmed that the divestment has been approved by financial services regulator. Upon the divestment, the director representing AMCON on the board of Wema Bank, Mr Babatunde Kasali, has been recalled. Wema Bank has already filed necessary notifications of the divestment and the resignation of the AMCON-appointed director with the financial services regulators.

    Not less than three billion ordinary shares of 50 kobo each of Wema Bank have been transferred in cross deals in the last two trading sessions. Cross deal implies that the transaction had been pre-arranged and the buyer and seller matched ahead of the formal transfer of holding at the NSE.

    A dealer on the NSE said the transfers were being done through Global Asset Management Nigeria Limited. The deals helped to place Global Asset Management Nigeria Limited as the securities firm with the largest volume of trade and second largest value at the stock market last week.

    AMCON had amassed large shareholding in Wema Bank, the oldest surviving indigenous bank, through acquisition of bad loans and subsequent private placement.

    In 2013, Wema Bank had issued shares to AMCON in a cash-for-equity private placement that involved some 14 billion ordinary shares.

    The investor that bought over AMCON’s equity stake cannot be confirmed as at press time. Other major investors in the bank included SW8 Investment Company Limited and Odua Investment Company Limited.

    Weekly summary of activities at the NSE indicated that a total of 3.59 billion ordinary shares of 50 kobo each of Wema Bank valued at N3.47 billion was traded in 85 deals last week, the largest by any quoted company during the period.

    Global Asset Management Nigeria Limited was atop the activities chart with 7.18 billion shares, representing 74.08 per cent of total turnover during the week. It ranked second with turnover value of N6.94 billion, representing 27.5 per cent of total turnover value.

    Total turnover at the NSE stood at 5.087 billion shares worth N18.487 billion in 16,711 deals as against a total of 1.133 billion shares valued at N9.463 billion traded in 16,680 deals in the previous week. Wema Bank’s financial services sector accounted for 4.9 billion shares valued at N11.4 billion in 9,840 deals; representing 96.25 per cent and 61.64 per cent of the total equity turnover volume and value respectively. Wema Bank alone accounted for 70.6 per cent of total turnover volume.

    The Asset Management Corporation of Nigeria (AMCON) has sold its equity stake in Wema Bank Plc.

    Sources in the know told The Nation at the weekend that the divested shares were part of the large volumes of shares recorded by the bank at the Nigerian Stock Exchange (NSE) in the last two trading sessions.

    A regulatory source confirmed that the divestment has been approved by financial services regulator. Upon the divestment, the director representing AMCON on the board of Wema Bank, Mr Babatunde Kasali, has been recalled. Wema Bank has already filed necessary notifications of the divestment and the resignation of the AMCON-appointed director with the financial services regulators.

    Not less than three billion ordinary shares of 50 kobo each of Wema Bank have been transferred in cross deals in the last two trading sessions. Cross deal implies that the transaction had been pre-arranged and the buyer and seller matched ahead of the formal transfer of holding at the NSE.

    A dealer on the NSE said the transfers were being done through Global Asset Management Nigeria Limited. The deals helped to place Global Asset Management Nigeria Limited as the securities firm with the largest volume of trade and second largest value at the stock market last week.

    AMCON had amassed large shareholding in Wema Bank, the oldest surviving indigenous bank, through acquisition of bad loans and subsequent private placement.

    In 2013, Wema Bank had issued shares to AMCON in a cash-for-equity private placement that involved some 14 billion ordinary shares.

    The investor that bought over AMCON’s equity stake cannot be confirmed as at press time. Other major investors in the bank included SW8 Investment Company Limited and Odua Investment Company Limited.

    Weekly summary of activities at the NSE indicated that a total of 3.59 billion ordinary shares of 50 kobo each of Wema Bank valued at N3.47 billion was traded in 85 deals last week, the largest by any quoted company during the period.

    Global Asset Management Nigeria Limited was atop the activities chart with 7.18 billion shares, representing 74.08 per cent of total turnover during the week. It ranked second with turnover value of N6.94 billion, representing 27.5 per cent of total turnover value.

    Total turnover at the NSE stood at 5.087 billion shares worth N18.487 billion in 16,711 deals as against a total of 1.133 billion shares valued at N9.463 billion traded in 16,680 deals in the previous week. Wema Bank’s financial services sector accounted for 4.9 billion shares valued at N11.4 billion in 9,840 deals; representing 96.25 per cent and 61.64 per cent of the total equity turnover volume and value respectively. Wema Bank alone accounted for 70.6 per cent of total turnover volume.

     

  • Shareholders meet on Oando, OER buy-out offer

    Oando Energy Resources (OER)- the Toronto Stock Exchange (TSX)-listed exploration and production subsidiary of Oando Plc, has scheduled a shareholders’ meeting to vote on a proposal by Oando Plc to buy out the outstanding minority shareholdings in the exploration and production subsidiary.

    The meeting, according to a regulatory filing yesterday, is scheduled for February 25, 2016 in Vancouver, British Columbia. The board of OER has already recommended to shareholders to vote in favour of the special resolution authorizing the purchase of the minority shares.

    As part of the transaction, OER has notified the TSX and applied for the delisting of the common shares upon completion of the arrangement. In addition, in accordance with Section 720 of the TSX Company Manual, the company has applied to voluntarily delist the common share purchase warrants it issued from the facilities of the TSX upon completion of the arrangement. An exemption from the requirement for security holder approval of such delisting is available pursuant Section 604(f) of the TSX Company Manual because Oando Plc holds more than 90 per cent of the common shares.

    However, the completion of the transaction, including the delisting of the common shares and warrants from the facilities of the TSX, will be subject to, among other things, approval by the syndicate of lenders in OER’s $450 million senior secured facility.

    Oando had entered into a definitive agreement with OER to sell the outstanding minority shareholdings in the OER to another wholly-owned foreign-based subsidiary, Oando E&P Holdings Limited.

    Oando E&P Holdings Limited will also subsequently take over shares held by Oando Plc and other institutional shareholders in OER, making OER a wholly-owned subsidiary of the Oando E&P Holdings Limited, a private company incorporated under the laws of the Province of British Columbia as a wholly-owned subsidiary of Oando Plc.

    Earlier regulatory filing at the Nigerian Stock Exchange (NSE) indicated that Oando E & P Holdings Limited would acquire all the outstanding minority shares under a plan of arrangement for a cash consideration of $1.20 per share.

    Oando holds, either directly or indirectly, 746,107,838 of the common shares of OER, representing approximately 93.7 per cent of the issued and outstanding common shares. Pursuant to the plan of arrangement, Oando E & P Holdings Limited will acquire all of the common shares that are held either directly or indirectly by the institutional shareholders and Oando.

    In consideration for such transfer, Oando and the institutional shareholders shall receive such number of shares of Oando E & P Holdings Limited as reflects the number of their contributed common shares for the purposes of completing the transactions contemplated by the plan of arrangement. The referenced institutional shareholders are M1 Petroleum Ltd, West African Investment Ltd and Southern Star Shipping Company Inc.

    The consideration represents a 177.2 per cent premium to the 20-day volume weighted average price of OER’s common shares on the Toronto Stock Exchange for the period ending December 21, 2015, using the Bank of Canada US$ to CDN$ closing exchange rate of 1.3965 on December 21, 2015. The transaction provides total consideration to holders of minority shares of approximately US$13.7 million and implies an equity value for the company of approximately US$955.3 million.

  • John Holt explores new businesses to drive growth

    John Holt explores new businesses to drive growth

    John Holt Plc, one of Nigeria’s oldest conglomerates, is exploring new business opportunities to mitigate import-related influence on its businesses and strengthen its domestic products and businesses. These moves come as John Holt seeks to expand its businesses in Nigeria as it struggles with the external shocks due to Naira depreciation.

    In the business outlook for the conglomerate, the board of the company said it has been exploring for new business opportunities including provision of electrical transformers, electrical equipment and expansion of fire control business to widen the revenue base of the group.

    The conglomerate said it was seeking investments in businesses that are less import dependent as devaluation of the Naira remains a drain on bottomline.

    According to the company, with its business interests ranging from engineering, leasing, trade and distribution, the devaluation of the Naira was a drain on bottom lines since most of its raw materials and equipments are imported.

    “Because we are an import dependent company, we had N500 million wiped out because of devaluation,” the company stated.

    The board of the conglomerate said it has started implementing a number of measures to improve liquidity and profitability of the group as well as strategies to enhance revenue and control costs.

    The board of the company said it has also been working on injection of long-term funds in order to ensure that the company has adequate resources to continue in operation for the foreseeable future.

    The audited report for the period ended September 30, 2015 showed that John Holt’s debt to adjusted capital ratio fell to 43 percent in 2015 as against 51 percent in 2014. Finance cost dipped by 7.60 percent to N231 million. The decrease in the debt to adjusted capital ratio for the group during the year resulted primarily from decrease in debt by N400 million from N1.8 billion in 2014 as against N1.4 billion in 2015, according to the company’s 2015 audited financial statement.

    Despite infrastructure deficits such as bad roads and  huge energy costs that spiral up operating expenses of companies in Africa largest oil producer Nigeria, John Holt was able to reduce costs as administrative expenses fell by 20.10 percent to N682 million in 2015 from N856 million in 2014.Distribution expenses were down by 20.30 percent to N856 million.

    The company spent less money on operating expenses to generate every unit of product as operating expense margin (OPEX) margin fell to 43.21 percent in 2015 from 48.10 percent in 2014.Cost of sales was down by 3.80 percent to N1.77 billion, thanks to effective cost control mechanisms put in place by management.

    John Holt attributed the slow growth in sales to reduced patronage from major customers in the oil and gas industry that got hit by the oil price crash.

    The report showed that group turnover dropped from N2.82 billion in 2014 to N2.43 billion in 2015. Gross profit also dropped from N967 million to N655 million. With exchange loss of N528 million in 2015, operating profit shrank from N677 million to N60 million. While finance costs reduced from N250 million to N231 million, the group incurred a loss before tax of N171 million in 2015 as against profit before tax of N427 million in 2014. After taxes, net profit of N591 million in 2014 turned into a net loss of N254 million in 2015. Earnings per share reversed from N1.52 in 2014 to a loss of 65 kobo in 2015.

  • Capital market stakeholders seek N200b intervention funding

    •Want govt to buy shares

    Capital market operators yesterday called on the Federal Government to stem the gruelling decline that has seen the market losing about N4 trillion in  25 months. The Nigerian equities market has lost nearly one-fifth of its  capitalisation so far this year.

    At a media briefing on the state of the capital market in Lagos, stakeholders under the auspices of the Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria (AIHN) said the Central Bank of Nigeria (CBN) should create a N200 billion intervention fund for market makers as a short-term measure to stave off the downward trend orchestrated  by divesting foreign portfolio investors.

    They also called on the government to step in to support the market at any time of steep decline by buying and warehousing shares as this is a common practice in advanced markets where government takes active interest in the performance of the capital market.

    Market operators said government should use the platform of the Nigerian capital market for funding of its 2016 budget as well as continuing privatization of government agencies and corporations.

    Stakeholders also called on Securities and Exchange Commission (SEC) to structure unclaimed dividends in a way that they could be reinvested in the capital market.

    Market operators said government should take a bold long-term move of instituting a zero interest policy for banks in order to discourage recourse to short-term money market instruments and to encourage long-term savings and investments.

    Acting president, Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Abe, noted that the Nigerian capital market has been going through challenges that are not uncommon with other markets especially the automated markets which operate in a crest and trough pattern in response to variables in the macro economy and within the market itself.

    He pointed out that the current steep decline at the stock market is due to three main factors including adverse macro-economic environment largely due to the drastic drop in the price of crude oil, negative public sentiment which is related to the state of the macro-economy and the retreat of foreign portfolio investors which is related to CBN’s policy on foreign exchange.

    President, Association of Stockbroking Houses of Nigeria (ASHON), Mr Emeka Madubuike, explained that the N200 billion intervention fund would provide liquidity to the market makers such that each market maker should be able to access between N1 billion and N10 billion in concessionary funding.

  • Equities sustain modest rally with N48b gain

    Trading at the Nigerian stock market reopened on Monday with sustained positive sentiments, although investors appeared to be more cautious and the spread of the rally appeared to be narrowing down.

    Key benchmark indices at the Nigerian Stock Exchange (NSE) showed modest improvements as investors await the decisions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), which started its two-day meeting on Monday and it is billed to conclude and make its monetary policy statements on today.

    With 25 gainers to 15 losers, aggregate market value of all quoted equities improved by N48 billion from N8.194 trillion to close at N8.242 trillion. The All Share Index (ASI)-a value-based index that tracks prices of all quoted equities, also rallied by 0.58 per cent to close at 23,963.64 points as against its opening index of 23,826.50 points.

    The sustained uptrend helped to reduce the accumulated losses so far this year, reducing the negative average year-to-date return to -16.33 per cent.

    Nestle Nigeria led the gainers with a gain of N17.86 to close at N725.01. Guinness Nigeria followed with a gain of N10.43 to close at N112.28. Seplat Petroleum Development Company rose by N7.83 to close at N164.54. Seven-Up Bottling Company added N3.30 to close at N190 while Flour Mills of Nigeria gathered N1.02 to close at N17.95 per shares.

    Total turnover stood at 215.18 million shares worth N2.10 billion in 3,861 deals. Zeni9th Bank was the most active stock with a turnover of 42.89 million shares worth N521.76 million. United Bank for Africa followed with a turnover of 28.18 million shares worth N85.7 million.

    Analysts at Afrinvest Securities said attractive prices in the market spurred investors’ appetite for value stocks, especially in the oil & gas and banking spaces as bargain hunting drove the indices northwards.

    “The waning market breadth suggests investors are already taking profit but we broadly expect the decision of the Monetary Policy Committee (MPC), scheduled to be released tomorrow to determine trading sentiment. Given the current attractive entry price of some fundamentally strong stocks, long term opportunities still exist in the market although we advise investors with a short holding period to trade cautiously,” Afrinvest Securities stated.

    On the negative side, Nigerian Breweries led the losers with a loss of N5.20 to close at N102.80. Lafarge Africa declined by N1 to close at N81. Berger Paints dropped by 96 kobo to N9.01. Northern Nigerian Flour Mills lost 40 kobo to close at N7.73 while FBN Holdings declined by 23 kobo to close at N4.27 per share.

  • ‘Vitafoam Nigeria, Vono Products merger will benefit shareholders’

    ‘Vitafoam Nigeria, Vono Products merger will benefit shareholders’

    The merger of Vitafoam Nigeria Plc and Vono Products Plc would create better values for shareholders of the two companies and enhance the long-term competitiveness of the larger company.

    Shareholders of both Vitafoam Nigeria and Vono Products last week voted in favour of a scheme of merger, which will see Vitafoam Nigeria absorbing Vono Products.

    Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi said the merger of the two leading foam and bedding companies would lead to higher earnings and enhanced shareholder value.

    Addressing journalists in Lagos, Adeniyi said the shareholders of the two companies voted in favour of the merger because of potential benefits such as economies of scale, cost savings and improved operational and administrative efficiencies among others.

    According to him, the enlarged company would have enhanced growth in size and profitability.

    “If we produce foam and Vono produces furniture, they are complementary. It is a strategic decision for Vitafoam to have Vono as a subsidiary. As you are aware, we have other subsidiaries such as Vitabloom, Vitagreen and Vitapur. Each of them produces distinct products. But they have something in common and this defines the unity of purpose,” Adeniyi said.

    He said the national spread of the group and its international operations have positioned it to weather tough operating environment and continue to deliver better values for shareholders.

    “We are truly a national company. We have a full fledged factory in Ikeja, Kano, Aba and Jos. We also have factories offshore. We operate in Sierra Leone and Ghana and these are strategic centres aimed at positioning us for inflow of forex in the long term. They may not be generating expected profit for now but they have high prospect .The key issue is that Vitafoam as a group has a very bright future and the shareholder value would be greatly enhanced,” Adeniyi said.

    Corroborating him, Group Executive Director, Corporate Services, Vitafoam Nigeria, Mr Olatunji Anjorin described the merger as a vertical one as the furniture produced by Vono Products would complement Vitafoam’s foams.

    Anjorin explained that the consummated merger would put an end to past encumbrances militating against Vono’s growth, bringing about more efficient expertise, shared value and improved technology.

    Commenting on the operating environment , Adeniyi lamented the plight of manufacturers and pleaded that the federal government should address the chronic shortage of dollar and also revive Eleme Petrochemical Industry to live up to its strategic objective of serving as a hub for providing raw materials.

  • Skye Bank to raise new capital in first quarter 2016

    Skye Bank to raise new capital in first quarter 2016

    Skye Bank Plc has started arrangements to raise additional equity funds within the next two and half months as the commercial bank seeks to beef up its capital base and improve its working capital.

    Group managing director, Skye Bank, Mr. Timothy Oguntayo, who disclosed this yesterday at an interactive session with top stockbrokers in Lagos, said the bank had entered into discussions with some of its key shareholders and strategic potential investors for fresh capital injection.

    He expressed optimism that the new capital raising exercise could be completed during the first quarter.

    He however noted that the bank’s capital adequacy ratio of 15.87 per cent, out of which 12.4 per cent is covered by common equity, was already in compliance with Basel 11 provisions.

    He said the bank is shifting its business focus to retail and commercial banking as it enters a new growth phase after the acquisition and integration of erstwhile Mainstreet Bank Limited.

    Oguntayo said retail banking as the bank’s new business focus would be pursued in 2016 for more traction adding that the small and medium enterprises (SMEs), small businesses and priority banking would be strengthened.

    He said the bank has set for itself in the medium to long term, strategies to achieve growth for the good of shareholders and other stakeholder.

    He recalled that in 2015 the board of the bank had appointed four new executive directors to the board; concluded the design of a three-year strategic plan from 2016-2018; achieved certification by the British Standard Institution on IT Service management, business continuity and IT management for the integrity of its operations as part of efforts to strengthen its operations.

    He said the bank had commenced structured capacity building programmes for the SME segment, working with the International Finance Corporation (IFC) on the business model and risk management framework and product innovation for its retail business.

    According to him, other measures taken to strengthen the retail banking business of the bank included retooling the locations acquired from the legacy Mainstreet Bank for the mobilization of cheap low cost funds, enhancement of the electronic channels to support the branch network and intensification of acquisition of customers across the retail segment.

    Oguntayo said the bank had been working on continuous improvement in structure, practices and resource deployment in risk management, adoption of enterprise-wide risk management approach, board oversight on risk portfolio to ensure diversification of risks, as well as vibrant and proactive credit monitoring framework.

  • FCMB alerts investors of lower earnings

    FCMB Group Plc, the holding company for First City Monument Bank and its former subsidiaries, has forewarned investors that it would report lower earnings for 2015 financial year. The profit warning compounded the downtrend at the Nigerian stock market, sending FCMB’s share price down by 8.47 per cent to N1.08 per share.

    In a profit warning made available at the Nigerian Stock Exchange (NSE) on Monday, FCMB said its earnings in third quarter 2015 will be materially below earnings for the corresponding period in 2014. It added that the fourth quarter 2015 earnings also followed a similar trend with the third quarter 2015.

    Managing director, FCMB Group Plc, Mr. Peter Obaseki  said the slowdown in the third quarter continued in fourth quarter 2015 and largely emanated from wholesale banking activities, although retail banking showed greater resilience and earnings momentum.

    “Third quarter 2015 earnings as at September 2015, will be materially below earnings for the same period in 2014, due to two factors: a spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity,” Obaseki said.

    He however assured that 2016 will be characterised by continued growth in retail contribution, stabilisation of wholesale banking revenues and increased focus on cost efficiencies in order to restore earnings levels.

    First City Merchant Bank Limited was established in 1982 and began operations as a licensed deposit taker and merchant bank on August 11, 1983. It was the first Nigerian merchant bank to be established without government or international support.

    With the advent of universal banking in 2001, First City Merchant Bank Limited converted into a universal bank. It changed its name to First City Monument Bank Limited and commenced commercial banking activities, while its corporate finance activities were spun-off into a new subsidiary – FCMB Capital Markets Limited.

    In 2004, the bank changed status from a private limited liability company to a public limited liability company, and was listed on the NSE in December of that year. In 2010, the Central Bank of Nigeria (CBN) issued Regulation 3 (Scope of Banking Activities and Ancillary Matters, No. 3, 2010), which required banks to divest their non-banking businesses or retain them under a CBN-approved financial group structure.

    As a result of this reorganisation, the newly created FCMB Group Plc became the holding company, with First City Monument Bank Plc (FCMB Plc), CSL Stockbrokers Limited (CSLS) and FCMB Capital Markets Limited (FCMB-CM) as direct subsidiaries. Shareholders of FCMB Plc were also migrated to FCMB Group Plc via a one-for-one share exchange between FCMB Group Plc and FCMB Plc. FCMB Plc, the bank, was thereafter re-registered as a limited liability company, becoming First City Monument Bank Limited (FCMB Limited). In 2014, CSL Trustees Limited also became a direct subsidiary of FCMB Group Plc.

  • Guinness Nigeria acquires rights to USL’s brand in Nigeria

    Guinness Nigeria acquires rights to USL’s brand in Nigeria

    Guinness Nigeria Plc (“GN”) has agreed to acquire the rights to distribute McDowell’s’, a mainstream spirits brand of United Spirits Limited (USL) in Nigeria, says Guinness.

    The Corporate Relations Director of Guinness Nigeria, Mr. Sesan Sobowale in a release issued yesterday said USL is an Indian mainstream spirits business which is also a subsidiary of Diageo Plc. He said the transaction will become effective on February 1, 2016.

    Industry analysts believe the move by Guinness Nigeria is part of strategic efforts to deepen its leadership in the Nigerian market especially in other category other than beer..

    It will be recalled that Guinness Nigeria Plc recently acquired the exclusive distribution rights to Diageo plc’s International Premium Spirits (IPS) brands in Nigeria.

    As part of the transaction, Guinness Nigeria will also take over various assets including the current inventory of Diageo Brands Nigeria Limited, the wholly-owned Diageo business which currently distributes and markets the IPS brands in Nigeria.

    The consideration for the transaction was put at N2.35 billion with the transaction expected to be concluded by 31 December 2015 and the new distribution agreement for the IPS brands to become effective on 1 January 2016 subject to receiving all regulatory approvals.

    The Managing Director/CEO of Guinness Nigeria Plc, Peter Ndegwa, was quoted as saying that “The transaction will facilitate the achievement of Guinness ambition to create the best performing, most trusted and respected consumer products company in Nigeria by leveraging the strength of our unparalleled portfolio of beer, adult premium non-alcoholic drinks (APNADs), ready to drink (RTDs) as well as spirits.

    ”The integration of the Diageo IPS brands with the Guinness Nigeria brand portfolio best fits our strategy of filling the gap in our total beverage alcohol portfolio, and allows us to compete across segments within the market.”