The Nation Newspaper

Category: Equities

  • Oando gets govt’s approval for $1.65b ConocoPhillips’ acquisition

    Oando gets govt’s approval for $1.65b ConocoPhillips’ acquisition

    The Federal Government yesterday approved the landmark acquisition of ConocoPhillips (COP) Nigerian assets by Oando Plc, paving the way for the final closure of the $1.65 billion acquisition deal.

    The much-awaited consent of the Minister of Petroleum Resources sealed the deal for Oando and sent investors scrambling for the shares of the leading indigenous integrated energy group. Oando’s share price rose by 7.99 per cent to close at N25 per share at the Nigerian Stock Exchange (NSE). Oando was also the most active stock as investors staked N992.9 million on 39.37 million ordinary shares of the company. Most analysts said they expected the price rally to continue in the days ahead.

    In December 2012, Oando, through its exploration and production subsidiary, Oando Energy Resources (OER), had entered into an agreement with COP to acquire its Nigerian businesses. Though Oando successfully acquired all funds required to complete its acquisition of the assets, closing of the COP acquisition had remained subject to the satisfaction of certain closing conditions, including government and regulatory approval, and the consent of the Minister of Petroleum Resources.

    Ministerial consent is the mandatory final approval of all oil and gas acquisitions by the  Minister of Petroleum Resources as required by the Petroleum Act of 1969 which states that “prior consent of the Minister of Petroleum Resources is obtained before the assignment of any right, power or interest in an oil prospecting licence or oil mining lease”.

    The Act stipulates that the Federal Ministry of Petroleum Resources must conduct due diligence to ensure ownership is being transferred to a company that is of good reputation, has sufficient knowledge, experience and financial resources to work the license or lease and in all other respects is acceptable to the Federal Government. Consent of the Minister may only be granted where the Minister is satisfied that the above conditions have been fully met.

    With the due completion of the game-changing acquisition, Oando would be immediately positioned as the largest indigenous oil producer in Nigeria and would now produce circa 50,000 barrels per day from six producing fields and will significantly impact its near immediate Upstream strategy and operations, and optimise its value across the energy chain.

    As it  awaited the government approval, OER had reached agreement with COP to extend the outside completion date for the acquisition till June 30, 2014.

    In a statement, OER stated that it would now work with ConocoPhillips towards completing the acquisition by the long stop date of June 30, 2014 or shortly thereafter.

    “Further to the receipt of consent of the  Minister of Petroleum Resources, OER and ConocoPhillips are now positioned to complete the ConocoPhillips transaction,” OER stated.

    As it awaited the ministerial approval, Oando had made a total deposit of $550 million to COP, one-third of the $1.65 billion deal while it has already amassed the funds needed to close the transaction. Oando last weekend secured extension of the availability period of the $450 million senior secured facility agreement arranged by a group of international banks, including Standard Chartered Bank, BNP Paribas and Standard Bank of South Africa Limited to August 31, 2014.

    The facility is a five and a half years lending arrangement which amortises quarterly with an annual interest rate of LIBOR plus 8.5 per cent. Proceeds from the facility are intended to be used to fund a portion of the purchase price for the COP’s acquisition. All terms and conditions under the initial executed binding documentation remain unchanged.

    It had also undertook many capital raising exercises through a combination of equity and debt including $200 million from a special placement of two billion shares, $100 million through the sale of its subsidiary East Horizon Gas Company and debt from financial institutions totaling $800 million.

    Commenting on the approval, the Group Chief Executive, Oando Plc, Mr Wale Tinubu, said the company would immediately complete the acquisition

    “We are delighted to receive the approval of the Minister of Petroleum Resources for the completion of our acquisition. It has been a long journey, wherein we kept faith with our strategy and executed every milestone diligently. This acquisition satisfies our criteria for assets in production, as well as excellent appraisal and exploration prospects. We will work hand in hand with the management team of ConocoPhillips to immediately complete the acquisition,” Tinubu said.

  • Nigerian equities regain bullish momentum

    Nigerian equities regain bullish momentum

    For the first time this week, Nigerian equities yesterday regained the bullish momentum as investors reacted to Oando’s acquisition of ConocoPhillips (COP)’s Nigerian assets and other bargain opportunities in the breweries and industrial goods sectors.

    Benchmark indices indicated a modest gain of 0.09 per cent yesterday, implying addition of N12 billion in new capital gains. Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) rose from its opening value of N13.583 trillion to close at N13.595 trillion. The All Share Index (ASI), the main index that tracks all quoted equities, inched up to 41,171.16 points as against its opening index of 41,135.40 points.

    The market situation remained tight with a loser for every gainer. However, gains by some highly capitalised stocks tilted the market position to positive while turnover remained around average.

    Nestle Nigeria, the highest-priced stock at the NSE, rose by N10 to close at N1,070. MRS Oil and Gas followed with a gain of N5.25. SIM Capital Alliance Fund added N4.91 to close at N103.24. Nigerian Breweries rose by N2.58 to close at N167. Oando gathered N1.85 to close at N25. Guinness Nigeria and Lafarge Cement Wapco Nigeria chalked up N1 each to close at N180 and N109 respectively. SEPLAT Petroleum Development Company garnered 94 kobo to close at N661. Ashaka Cement rose by 50 kobo to close at N27.51 while Ecobank Transnational Incorporated (ETI) added 47 kobo to close at N15.29 per share.

    Total turnover stood at 296.13 million shares worth N5.43 billion in 6,339 deals. Oando was the most active stock with a turnover of 39.37 million shares valued at N992.9 million in 962 deals. Wapic Insurance followed with a turnover of 28.06 million shares valued at N19.82 million in 162 deals. Transnational Corporation of Nigeria (Transcorp) placed third with a turnover of 24.23 million shares valued at N106.60 million in 344 deals.

    On the downside, Conoil succumbed to profit-taking pressure, losing N6.38 to close at N59.27. Mobil Oil Nigeria followed on the losers’ list with a drop of N3 to close at N129. Dangote Cement lost N1.99 to close at N227.01. Presco dropped by N1 to close at N36 while Guaranty Trust Bank declined by 20 kobo to close at N30 per share.

  • IFC acquires additional 4.6% stake in ETI

    International Finance Corporation (IFC), the private sector arm of the World Bank, has acquired additional 4.6 per cent equity stake in Ecobank Transnational Incorporated (ETI) Plc, the financial services holding group for all Ecobank banks, including Ecobank Nigeria Limited.

    ETI, which is listed on the Nigerian Stock Exchange (NSE), Ghana Stock Exchange (GSE) and the BRVM, Abidjan, is issuing more than 838.32 million ordinary shares of 50 kobo each to IFC, through convertible loan deals involving two funds being managed by the corporation.

    A document submitted to the NSE indicated that IFC is acquiring the shares through its managed funds-IFC ALAC Holding Company II and the IFC Capitalization (Equity) Fund LP.

    Under the deals, both funds would convert convertible debts earlier granted to ETI to shares, with effect from July 1, 2014. The outstanding convertible loans of about $56.39 million for the IFC Capitalization (Equity) Fund LP and $18.10 million for the IFC ALAC Holding Company II will be converted to some 628.74 million and 209.58 million ordinary shares of ETI respectively.

    Consequently, ETI will issue 838.32 million additional shares, increasing its outstanding shares by 4.9 per cent from 17.21 billion ordinary shares of 50 kobo each to 18.05 billion ordinary shares of 50 kobo each. However, The Nation’s check at the weekend indicated that ETI has 15.95 billion ordinary shares of 50kobo each issued and outstanding on the NSE.

    The conversions will automatically reduce ETI’s convertible debts by $75.180 million.

    ETI has already initiated steps to issue and list the additional shares on the three stock exchanges in line with usual requirements.

    It should be recalled that IFC had in 2012, through these two managed funds and another fund-Africa Capitalisation Fund Limited, acquired 8.63 per cent equity stake in ETI. It had acquired 1.25 billion ordinary shares at agreed price of 8.0 cents per share, totaling $100 million, about N15.6 billion. ETI then had 13.24 billion ordinary shares outstanding. The supplementary listing of the additional shares issued to IFC increased total outstanding shares to 14.49 billion shares, giving IFC 8.63 per cent post listing.

    According to the details of the acquisition, IFC Capitalization (Equity Fund) LP purchased 596.59 million ordinary shares for $47.73 million; Africa Capitalisation Fund Limited acquired 340.91 million ordinary shares for $27.27 million while IFC ALAC Holding Company II acquired 312.5 million ordinary shares for $25 million.

    The investment followed the signing of share subscription agreements in July 2012 between IFC and ETI when IFC invested $100 million by way of common equity in ETI.

     

  • Diamond Bank seeks N50.4b from existing shareholders

    Diamond Bank seeks N50.4b from existing shareholders

    Diamond Bank Plc plans to raise about N50.4 billion from its shareholders as it seeks to strengthen its capital base.

    A regulatory filing obtained at the weekend by The Nation indicated that Diamond Bank plans to undertake a rights issue of about 8.69 billion ordinary shares of 50 kobo each at N5.80 per share. Diamond Bank’s share price closed at the Nigerian Stock Exchange (NSE) at N6.70 per share.

    According to the report, the rights issue would be pre-allotted to shareholders of the bank as at the weekend, June 13, 2013.

    Already, the bank has submitted application for the rights issue to the NSE.

    The Nation had recently reported exclusively that many banks might be consider raising new capital to complement their balance sheet to place them in better position to increase lending and further their expansion.

    Investment banking sources had told The Nation that although the average capital adequacy ratio in the Nigerian banking industry remains considerably high and most banks are above regulatory benchmark, banks have indicated they might seek new capital.

    The banks were said to be considering raising new capital mostly through debt and quasi-equity instruments but some were also considering equity issues.

    Sources said banks were being proactive to ensure adequate long-term capital plan for their expansion plans. Other banks that have initiated plans to raise funds included Skye Bank Plc and Sterling Bank

    Recent analysts report indicated that Nigerian banks were generally adequately capitalised with several banks.

    According to analysts, most of the banks are adequately capitalised to absorb losses without requiring emergency capital injections in case of any further write-offs.

    Analysts however noted that the rebasing of the Nigerian economy has created lending space that banks will require more capital to fill.

    Diamond Bank had announced a 16.7 per cent increase in profit before tax to N32.1billion for the full year ended December 31, 2013. The bank declared a dividend of 30 kobo per ordinary share.

    Group managing director, Diamond Bank, Dr. Alex Otti, had noted that the pre-tax profit exceeded its N30 billion profit guidance pointing out that the result is rooted in the bank’s strength to attract low-cost deposits and deploy these into various assets at profitable yet acceptable risk levels.

    While the bank achieved a net interest income of N104.6 billion, an increase of 17.1 per cent from N89.3billion recorded in 2012, it generated interest and similar income of N143.1 billion, an increase of 27.3 per cent from N112.4 billion earned in 2012. Diamond Bank also achieved a 46.2 per cent increase in other income from N23.8 billion it recorded in the preceding year to an impressive to N34.8 billion in 2013.

    Diamond Bank’s 2013 financial results also showed improvements in various areas of the group balance sheet with loans and advances to customers increasing by 17.8 per cent to N689.2 billion; deposits from customers increasing by 32.5 per cent to N1, 206 billion.

  • NSE records N136 billion loss

    NSE records N136 billion loss

    Nigerian equities suffered a  reversal yesterday as losses recorded by the market’s most capitalised stock, Dangote Cement Plc, overwhelmed the otherwise widespread bullish sentiments and pushed the market to a loss of N136 billion.

    While most equities recorded gains and the momentum of activity was on the average, a 2.50 per cent decline in the share price of Dangote Cement orchestrated the market’s biggest decline this week. Other highly capitalised stocks, which moderate losses contributed to the negative market situation included Flour Mills of Nigeria, Dangote Sugar Refinery, Access Bank and Oando Plc.

    With 31 gainers to 22 losers, aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) dropped by N136 billion to N13.614 trillion from its opening value of N13.750 trillion. The main index at the NSE, the All Share Index (ASI), which also doubles as Nigeria’s country index, slipped by 0.99 per cent to close at 41,228.65 points as against its opening index of 41,642.55 points.

    The steep decline yesterday wiped out the modest average-year-to-date return and left the market with a negative five months-and- a-half return of -0.24 per cent.

    Dangote Cement led the losers with a loss of N5.75 to close at N224.25. Flour Mills of Nigeria dropped by N1 to close at N77. National Salt Company of Nigeria (Nascon) and UACN Property Development Company followed with a loss of 40 kobo each to close at N11.60 and N17.60 respectively. Oando dropped by 10 kobo to N20. Learn Africa, Cutix and Mansard Insurance dropped by 9.0 kobo each to close at N1.71, N1.83 and N2.41 respectively. Access Bank lost 8.0 kobo to close at N9.83 while Dangote Sugar Refinery dropped by 6.0 kobo to close at N9.54 per share.

    Meanwhile, most price changes ended on the upside with Conoil leading with a gain of N6.13 to close at N65.98. PZ Cussons Nigeria followed with a gain of N1.56 to close at N38.50. Guinness Nigeria rallied N1 to close at N180. Lafarge Cement Wapco Nigeria rose by 80 kobo to close at N110.50. Ashaka Cement gathered 69 kobo to close at N26.99. Eterna added 39 kobo to close at N4.23. Guaranty Trust Bank rose by 34 kobo to close at N31.25. Union Bank of Nigeria rose by 20 kobo to close at N10.26. Caverton gained 19 kobo to close at N4.53 while Ecobank Transnational Incorporated rose by 16 kobo to close at N16.76.

    Investors staked a total of N3.72 billion in 341 million shares in 5,344 deals. Financial services sector regained the momentum as the most active sector with a turnover of 255.57 million shares worth N1.57 billion in 2,523 deals.

    On stock-by-stock basis, Wapic Insurance was the most active stock with a turnover of 72.73 million shares worth N56.51 million in 198 deals. United Bank for Africa followed with 40.47 million shares worth 327.99 million in 332 deals while Access Bank ranked third with a turnover of 37.38 million shares worth N370.29 million in 128 deals.

  • IOSCO intensifies efforts to strengthen capital markets

    IOSCO intensifies efforts to strengthen capital markets

    The International Organization of Securities Commissions (IOSCO) has set up a work agenda to strengthen and foster the roles of capital markets as trusted sources of capital with a view to encouraging greater use of capital markets as financing channels for transactions.

    The board of IOSCO, which met in Madrid, discussed progress on a number of key initiatives to support the G20-FSB efforts to restore stability in the global financial system and build economic growth.

    The board, which included Nigeria’s Securities and Exchange Commission (SEC), also looked into methodologies for identifying non-bank global systemically important financial institutions or activities in the areas of asset management and market intermediaries.

    IOSCO also discussed the role capital markets and securities regulators can play in supporting long-term finance, including infrastructure investment and small and medium enterprises (SME )financing.

    The meeting also considered the implementation of IOSCO Principles on Financial Benchmarks, the IOSCO Principles for Oil Price Reporting Agencies and the IOSCO Principles for the Regulation and Supervision of Commodity Derivatives Markets.

    Chairman, International Organization of Securities Commissions (IOSCO), Greg Medcraft said capital markets are emerging as a key source of the finance needed across the globe to drive economic growth.

    “Through a work agenda focused on fostering markets as a trusted source of capital, IOSCO is playing an important role in supporting that growth,” Medcraft noted.

    The IOSCO board also discussed audit quality and important initiatives to build confidence in global securities markets and to reduce the reliance of asset managers and market intermediaries on credit ratings as well as promote effective credible deterrence as a key element in improving investor protection and confidence in markets.

    Members discussed the results of the IOSCO research department´s latest market survey on market trends, which emphasizes the growing leverage in securities markets, the impact of cross-border capital flows on emerging markets, financial risk disclosure, collateral management, and potential counterparty risk in central clearing houses.

    Board members also examined policy measures aimed at building capacity in emerging markets and supporting the creation of strong regulatory frameworks for sustaining growth in both emerging and developed markets.

    The meeting also discussed possible capacity building projects and agreed to a proposal for a one-off fee from permanent Board members next year to start off the program.

    IOSCO also agreed to move forward on an IOSCO Global Certificate Programme for securities regulators.

    The meeting was preceded by a round table attended by the board and four external experts on corporate governance from the financial industry and academia. Participants discussed the need for regulators to work towards restoring the social legitimacy of financial institutions, as a key step to safer financial markets and renewed trust in the financial system. The discussion highlighted the benefits to IOSCO and its members of co-operation and engagement with its members and industry.

    In another related development, the Comisión Nacional de Valores of Argentina became the 103rd signatory of the Multilateral Memorandum of Understanding on cooperation and exchange of information, during a signing ceremony in Madrid.

    IOSCO is the leading international policy forum for securities regulators and is recognised as the global standard setter for securities regulation.

  • US, emerging stocks fall on concerns over Iraq conflict

    US, emerging stocks fall on concerns over Iraq conflict

    United States (US) stocks slumped the most in three weeks and oil climbed to an eight-month high as violence escalated across Iraq. Treasuries rallied on signs the US economic recovery remains uneven.

    Bloomberg reported that the Standard & Poor’s 500 Index slipped 0.8 per cent and the Nasdaq Composite Index tumbled one per cent. West Texas Intermediate oil rose two per cent to $106.53 a barrel, the highest level since September.

    The yield on 30-year Treasuries dropped six basis points, the most in two weeks, to 3.41 per cent. The S&P GSCI (SPGSCI) gauge of 24 commodities jumped 1.6 per cent, the biggest increase in three months. Natural gas futures climbed the most in almost four months, while gold and silver advanced at least one per cent.

    A surge in violence across northern and central Iraq, three years after US troops withdrew, has raised the prospect of a return to sectarian civil war in OPEC’s second-biggest oil producer. US energy shares rallied while Delta Air Lines Inc. and United Continental Holdings Inc. slumped more than 5.9 per cent. American retail sales rose less than forecast in May while jobless claims increased last week, reports showed yesterday.

    “The Middle East may not matter as much as it used to for global energy markets, but the collapse of democracy in Iraq and the risk of extremists being the dominant political force in the region is already making some commentators question how long the US ‘hands-off’ policy will really be maintained,” Kit Juckes, global strategist at Societe Generale SA in London, wrote in an e-mailed note yesterday.

  • Portland Paints bounces back with N107m profit

    Portland Paints bounces back with N107m profit

    The board of Portland Paints and Products Nigeria Plc has assured shareholders that ongoing investments would strengthen the company’s profitability as it recovered from a loss of N228.4 million in 2012 to a net profit of N107 million in 2013.

    At the annual general meeting at the Golden Tulip Hotel, Festac, Lagos, the company presented its audited report and accounts for the year ended December 31, 2013 to shareholders amidst promises that the bottom-line will become better in the years ahead.

    The audited report showed that while sales dropped marginally by 3.0 per cent from N2.87 billion in 2012 to N2.77 billion in 2013, profit before tax stood at N123.59 million in 2013 as against loss before tax of N199.17 million in 2012. After taxes, net profit stood at N107.5 million in 2013 compared with net loss of N228.37 million in previous year. The company’s shareholders’ funds rose by 14 per cent from N776.57 million to N884.04 million.

    Chairman, Portland Paints and Products Nigeria Plc, Mr. Larry Ettah, attributed the turnaround in the fortune of the business to successful implementation of innovation and proactive policies.

    According to him, the company had continued to implement its strategies for the enhancement of its service delivery through the restructuring of its operations and, in particular, the route to the market and focus on areas of its core competencies, enforcement of procedures and processes in tandem with the group’s policies.

    He noted that the bold initiatives taken by the directors have repositioned the company for sustainable growth and improved performance in 2014 and in the years ahead.

    “For our company, the future is indeed bright, as we are poised to reap the benefits of the investments we are currently making in the business,” Ettah said.

    He however expressed concerns over the macroeconomic outlook urging that as the country moves closer to the forthcoming elections in 2015, it was imperative for political representatives and policy makers to ensure that their activities impacted positively on the business environment.

    According to him, the security challenges in the Northern part of the country with the attendant consequences of loss of lives and properties, domestic constraints such as increasing oil theft and piracy, depletion of fiscal buffers, dwindling foreign reserves, erratic supply of electricity and poor infrastructure – all made the business operating environment to be difficult.

    He expressed optimism on the growth prospect of the Nigerian economy in the medium term pointing out that while most analysts expect foreign reserves to decline marginally due to Central Bank of Nigeria’s strategy of using the external reserve to stabilize the Naira and the likelihood of modest currency depreciation, there is reason to be optimistic on the growth prospect of the economy in the medium term due to the likelihood of continued sustenance of the Federal Government’s reforms in the power, transportation and agriculture sectors of the economy.

  • Oil, cement stocks rally equities to N40b gains

    Oil, cement stocks rally equities to N40b gains

    Leading petroleum-marketing and cement-manufacturing companies rallied the Nigerian stock market to a modest gain yesterday as investors upped demand for quoted shares.

    Against the background of a decline of 0.21 per cent in the previous trading session, substantial gains recorded by several large-cap stocks drummed up the market momentum. The stock market recorded average day-on-day return of 0.29 per cent, propping up the average year-to-date return to 0.76 per cent.

    The main index at the Nigerian Stock Exchange (NSE), the All Share Index (ASI), rallied to its week’s high at 41,642.55 points as against its opening index of 41,521.40 points. Aggregate market value of all quoted companies increased by N40 billion from N13.710 trillion to N13.750 trillion.

    While there were noticeable bearish sentiments in the insurance and consumer goods sectors, the market leveraged on the positive market situation in the petroleum-marketing, banking and industrial goods sectors.

    The NSE Oil and Gas Index rode on the back of gains by Mobil Oil Nigeria, Conoil and Eterna to close at 432.94 points as against its opening index of 430.09 points. The NSE Industrial Goods Index, where the cement stocks are categorized, also rose on the crest of gains by Dangote Cement, Ashaka Cement and Cement Company of Northern Nigeria (CCNN) to close higher at 2,580.11 points compared with its opening index of 2,576.29 points.

    Mobil Oil Nigeria led the 30-stock gainers’ list with a gain of N5.05 to close at N131.05. Dangote Cement rose by N3.40 to close at N230. Conoil added N2.85 to close at N59.85. UACN Property Development Company garnered 75 kobo to close at N18. Beta Glass chalked up 59 kobo to close at N16.59. Guaranty Trust Bank rose by 41 kobo to close at N30.91. Ashaka Cement gained 25 kobo to close at N26.30. Eterna added 18 kobo to close at N3.84 while CCNN rose by 17 kobo to close at N10.27 per share.

    Losses recorded by Nestle Nigeria, Unilever Nigeria, Guinness Nigeria and Nigerian Breweries weighed in on the consumer goods sector. Nestle Nigeria led 23 other stocks on the losers’ list with a drop of N10.01 to close at N1,070. Lafarge Cement Wapco Nigeria followed with a loss of N2.29 to close at N109.70. Unilever Nigeria dropped by N1.05 to close at N49.60. Guinness Nigeria declined by N1.01 to close at N179. Nigerian Breweries lost N1 to close at N179. UAC of Nigeria slipped by 99 kobo to close at N59.01. Presco dropped by 95 kobo to close at N36.55. National Salt Company of Nigeria dwindled by 30 kobo to N12 while Nigeria Aviation Handling Company and Union Bank of Nigeria dropped by 24 kobo each to close at N4.75 and N10.06 respectively.

    Total turnover stood at 468.91 million shares valued at N3.85 billion in 5,347 deals. Transactions on Mass Telecommunication Innovation (MTI) Plc pushed the information and communication technology sector atop activity chart with a turnover of 202.64 million shares worth N101.37 million in 18 deals. Financial services sector followed with a turnover of 176.18 million shares worth N1.44 billion in 2,627 deals.

    MTI was the most active stock with a turnover of 200 million shares valued at N100 million in five deals. Transnational Corporation of Nigeria (Transcorp) placed second with a turnover of 35.16 million shares valued at N150.97 million in 490 deals while United Bank for Africa (UBA) Plc recorded a turnover of 35.14 million shares worth N281.97 million in 339 deals.

  • Investors swap 4.1% stake in MTI

    Investors swap 4.1% stake in MTI

    New strategic investors appeared to be taking positions in Mass Telecommunication Innovation (MTI) Plc as about 4.1 per cent of issued shares of the telecommunication-infrastructure company were swapped yesterday at the Nigerian Stock Exchange (NSE).

    Against the background of Tuesday’s announcement of a plan by a new shareholder to acquire majority stake in MTI, the company came atop the activity chart at the NSE with a turnover of 200 million shares valued at N100 million in five deals.

    The transactions yesterday represented 4.09 per cent of the company’s issued shares of 4.89 billion ordinary shares of 50 kobo each. The transactions were crossed at 50 kobo. MTI has struggled at its nominal price of 50 kobo as it contends with declining bottom-line.

    Tingo Mobile, a Nigerian mobile phone manufacturer, had on Tuesday stated that it had agreed to buy a majority stake in MTI for about N4 billion to develop rural broadband in Nigeria.

    Chief executive officer, Tingo Mobile, Dozy Mmobuozi, said Tingo will acquire 51 per cent of MTI.

    According to him, MTI will be rebranded and remain listed on the NSE.

    “We’re using the acquisition to reach out to the mass market,” Mmobuozi said. Lagos-based MTI’s “assets from base stations to license and goodwill and other things, will help penetrate rural Nigeria.”

    Bloomberg reported that Telecommunications companies including China’s Huawei Technologies Co. and Johannesburg-based MTN Group Limited are expanding in Nigeria to tap a growing market for mobile and data usage. Africa’s biggest economy had 169 million mobile-phone subscriptions as of March for a population of about 170 million, the Nigerian Communications Commission said on its website.

    With many users owning more than one phone, subscriber numbers are expected to grow to more than 200 million in 2017, according to London-based research company Informa Telecoms & Media.

    Tingo said it will start selling three smartphones in Nigeria, the first time its devices will be made available to the public rather than to government or corporate customers. The Tingo T5, T500 and T561 models cost N10,000 to N18,000 and are made locally, Mmobuozi said. The Abuja-based company also has operations in Kenya and Malaysia.

    Tingo is making GPS tracking systems and mobile point-of-sale devices that can be attached to its phones as it looks to expand its Internet-based services business. New products include a chat application that localizes emoticons, using Nigerian cultural references.

    “In the next two months, we must have hit a 10 million subscriber base for our Tingo Chat app,” Mmobuozi said.