Category: Investors

The Nigerian Exchange (NGX) yesterday inducted a total of 133 authorised dealing clerks from 63 stockbroking firms with a charge to uphold the highest level of ethics and responsibility.

Chief Executive Officer, Nigerian Exchange (NGX), Mr. Temi Popoola congratulated the inductees who had passed through the Exchange’s Automated Trading System training faculty made up of seasoned capital market regulators and operators.

“This induction is evidence of years of dedication, adaptability, and hard work, and symbolises your commitment to uphold the highest ethical standards and to always put the interest of the market first,” Popoola said.

He advised the new clerks to embrace the culture of continuous learning in the fast-paced environment that is the capital market.

“As the market deepens with the launch of new products, I encourage everyone to seek for better understanding of various aspects of the capital market as well as new developments. The X-Academy, our specialised learning centre is equipped to fill this gap by offering a wide range of courses geared towards bridging the knowledge gap of capital market professionals, investors and the general public, about how the capital market works. Please ensure that you maximise the opportunities presented by X-Academy to stay up to date on market developments,” Popoola said.

Doyen of Stockbrokers, the oldest trading stockbroker on the floor, Rasheed Yussuf, called on the newly inducted dealing clerks to live up to the creed in the capital market “our word is our bond” as this would engender confidence in the capital market and lead to growth in the various firms being represented.

Similar words of wisdom were presented by Mr. Sam Onukwe, chairman, Association of Securities Dealing Houses of Nigeria (ASHON), and Mr. Olatunde Amolegbe, president, Chartered Institute of Stockbrokers.

Others at the event were   Mahmud Muhtar, Commissioner, Registrations, SEC, who represented the Director-General, SEC, Mr. Lamido Yuguda, and the CEO, Central Securities Clearing System (CSCS), Mr. Haruna Jalo-Waziri.

Learn Africa plans to combine organic and inorganic growth strategies to drive and sustain its growth.

The board of Learn Africa yesterday indicated that the educational publishing company plans to raise new equity capital as well as undertake a merger and acquisition deal to leverage its growth.

Directors of the company are scheduled to meet early next month to consider and approve two major resolutions on new capital raising and merger and acquisitions, after which the decisions will be extended to shareholders of the company.

According to a regulatory disclosure submitted by the company, Learn Africa plans to raise new equity funds from its shareholders through a rights issue.

The company is also considering a business combination option to bolster its performance, after suffering setbacks in recent years.

Formerly known as Longman Nigeria, Learn Africa was incorporated in August 1961. Its shares were listed on the Nigerian Exchange in July 1996.

Learn Africa’s principal activity is publishing and distribution of educational materials for all levels of learning including nursery, primary, secondary and tertiary education.

Audited report and accounts of Learn Africa for the year ended March 31, 2020 showed double-digit decline in sales and profitability. Underlying profitability ratios illustrated a slowdown, with returns dropping to lower levels. The company had cut dividend payout by two-thirds while shareholders’ net realisable earnings also dropped marginally. It must be noted that the comparable period of 2019 was a 15-month period as against 12-month period for 2020.

Notwithstanding, weakening ratios still coloured the overall performance negative.

Learn Africa recorded decline in actual profit and loss figures and underlying profit-making ratios. With its single business line of sale of titles to customers, total sales dropped by 17.5 per cent to N2.87 billion in 2020 as against N3.48 billion in 2019. Top-line decline was largely due to drop in office-based corporate sales as well as sales in the northern zone.

Significant decline in the two previous segments was moderated by considerable improvement in sales from the southern zone. Cost of sales dropped by 37 per cent from N2.21 billion to N1.39 billion. This supported 16 per cent growth in gross profit, from N1.27 billion to N1.48 billion. Total operating expenses rose by 13.5 per cent from N1.22 billion to N1.39 billion. Non-core business income dropped by 51.4 per cent from N350 million to N170 million. Interest expenses however jumped by 77 per cent from N21 million to N37 million. Profit before tax thus dropped by 41 per cent from N380 million to N224 million. After taxes, net profit dropped by 50.6 per cent to N80 million in 2020 as against N162 million in 2019.

Basic earnings per share halved from 21 kobo to 10 kobo. The company distributed total dividend of N39 million or a dividend per share of 5.0 kobo for the 2020 business year, 66.7 per cent below N116 million or 15 kobo paid for the 2019 business year. Net assets per share also slipped from N4.07 in 2019 to N4.03 in 2020. Dividend cover rode on the back of the cut in payout to 2.00 times in 2020 as against 1.40 times in 2019.

Underlying profitability ratios were mostly negative. Gross profit margin expectedly improved from 36.6 per cent to 51.6 per cent. Pre-tax profit margin however dropped from 11 per cent in 2019 to 8.0 per cent in 2020. Return on total assets declined from 6.8 per cent to 4.5 per cent while return on equity halved from 5.2 per cent to 2.6 per cent.

The NGX Regulation (NGXReg) has lifted the suspension on trading in the shares of Niger Insurance Plc after the insurer submitted its outstanding financial statements

The NGX Reg, the independent regulator of the NGX, had last July, suspended Niger Insurance and three other companies for failing to submit their financial statements after the expiration of deadline and extended period

Rules at the stock market require quoted companies to submit their audited financial statements not later than 90 days after the end of the business year.

Under the new filing regime options companies are to choose between submitting their fourth quarter results not later than 30 days after the end of the quarter and subsequently submit the full year results not later than 90 days or alternatively not to submit their fourth quarter but submit their full year results not later than 60 days after the end of the business year

Niger Insurance was suspended  for failing to submit its audited financial statements for the year ended December 31 2020 and first quarter 2021

The NGX Reg stated that Niger Insurance has submitted the audited full-year 2020 financial statements and unaudited financial statements for the first three quarters of 2021. The lifting of the suspension took effect on February 21, 2022.

The National Insurance Commission (NAICOM) had in 2020 Niger Insurance under regulatory watch.

After extensive review and discussions at a top-level meeting between NAICOM and the board and management of NAICOM, the Commission had ordered that Niger Insurance should not dispose any of its assets without the approval of the Commission.

Also, Niger Insurance should submit monthly report of its activities  with the monthly management account to NAICOM.

According to a regulatory filing by the company, the Commission also directed that the management of Niger Insurance should invite NAICOM to attend board meetings of the company as an observer.

 

Union Bank of Nigeria (UBN) Plc is seeking approval of its shareholders to distribute its entire shareholdings in its United Kingdom’s subsidiary to its shareholders.

The board of directors of UBN has called an extra-ordinary general meeting of Union Bank’s shareholders to consider and approve the proposed divestment of the bank’s entire shareholdings-direct and indirect, in Union Bank UK Plc (UBUK) to the shareholders of UBN.

In a regulatory filing at the Nigerian Exchange (NGX), UBN indicated that its equities in UBUK will be distributed to its shareholders pro rata to their existing shareholding interests in UBN, subject to obtaining any required contractual consents and regulatory approvals.

Under the planned divestment and distribution, the shares to be held in UBUK by shareholders of the UBN who each hold less than 0.2546 per cent of UBN’s issued share capital shall be placed under a trust to be established with Stanbic IBTC Trustees Limited (SITL). SITL shall be the legal shareholder of record in UBUK’s register, acting as trustee of the beneficial interests of the relevant UBN shareholders.

Shareholders are expected to approve and authorise  SITL to, on behalf of the shareholders, enter into and execute all such agreements and documents, appoint such professional advisers and other parties as may be required, take all such actions and steps and do all such other lawful things as may be necessary for and incidental to, administering the trust in such manner as SITL, acting reasonably, considers appropriate in its capacity as trustee and for giving effect to the trust and or divestment.

The proposed divestment through the distribution of UBUK’s shares came after UBN failed to consummate its previous sale of the UK subsidiary.

UBN had in January 2020 entered into a share sale and purchase deal to divest its 100 per cent equity stake in UBUK. The board of Union Bank had stated that the sale was in line with the bank’s strategy to geographically streamline its business operations to focus on growth opportunities in Nigeria.

According to the bank, following a competitive bid process, MBU BidCo Limited (MBU), an acquisition vehicle wholly owned by MBU Capital Limited (MBU Capital), was selected as the preferred bidder. The completion of the sale was however subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the UK.

MBU Capital is an investment management firm founded in 2013 and based in Mayfair, London. It has  interests in financial services, healthcare, education, real estate and technology. MBU Capital (UK) LLP is authorised and regulated by the Financial Conduct Authority.

UBN subsequently classified UBUK as “available for sale” as the parties sought to complete the sale process, although delayed due to the pandemic-induced lockdowns.

Vitafoam Nigeria Plc has seen more than 200 per cent increase in its share price at the stock market as the group sustained impressive growths in turnover and profitability. With 127 per cent increase in dividend recommended for the immediate past business, the group has released its first quarter unaudited results showing 47 per cent and 57 per cent growth in sales and profit respectively.

The three-month results for the period ended December 31, 2021 showed that turnover rose by 46.7 per cent from N8.666 billion in comparable period of December 2020 to N12.716 billion in December 2021. Gross profit increased to N3.99 billion, 39.3 per cent increase on N2.86 billion recorded in 2020. Operating profit grew by 40 per cent from N1.69 billion to N2.37 billion.

Profit before tax for the three-month period stood at N2.40 billion in December 2021 as against N1.53 billion in December 2020. After taxes, net profit increased by 51 per cent from N1.11 billion to N1.69 billion. Earnings per share thus increased from 89 kobo in December 2020 to N1.24 in December 2021.

The first quarter results came on the heels of the release of the audited report and accounts for the year ended September 30, 2021. The full-year report showed that Vitafoam Nigeria rode on the back of substantial sales growth to improve its bottom-line, enabling the board of the foam-manufacturing group to recommend 127 per cent increase in dividend payout.

The board of Vitafoam Nigeria is recommending total dividend payout of N2.224 billion for the 2021 business year as against N979.41 million paid for the 2020 business year.

According to the breakdown, shareholders on the register of the company as at the close of business on February 11, 2022 will receive a dividend per share of N1.50.

Key extracts of the audited report and accounts of Vitafoam Nigeria for the year ended September 30, 2021 submitted at the Nigerian Exchange (NGX) showed that group turnover rose by 51.3 per cent from N23.44 billion in 2020 to N35.40 billion in 2021. Group profit before tax grew by 30 per cent to N7.34 billion in 2021 as against N5.65 billion in 2020. Group profit after tax increased by 12 per cent from N4.11 billion to N4.60 billion in 2021. With these, group earnings per share increased from N3.05 in 2020 to N3.39 in 2021.

Further analysis on a standalone basis, showed that the parent company, Vitafoam Nigeria is contributing N1. 88 billion to the dividend payout, an increase of 114 per cent above N87. 59 million paid in 2020. The company’s turnover rose by 49 per cent to N32.01 billion in 2021 as against N21.82 billion in 2020. Profit before tax jumped by 37 per cent to N6.78 billion in 2021 compared with N4.96 billion recorded in 2020. Profit after tax increased from N3.46 billion to N4.38 billion. The company’s earnings per share rose from N2.76 in 2020 to N3.51 in 2021.

Shareholders of the company are expected to approve the financial statements and dividend recommendation at their annual general meeting (AGM), scheduled for Thursday, March 3, 2022 at Raddison Blue Hotel, Ikeja, Lagos. The dividend shall thereafter be paid electronically on Friday, March 4, 2022.

Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi, in a panel interview at the weekend gave insights into the operations of the group.

According to him, the overall outlook for the manufacturing sector , long-term investments in diversified operations, innovative research and product development and an efficient marketing system have all positioned the Vitafoam Group for continuous growth and improving returns to shareholders.

Factors driving growth

Over the years, Vitafoam has witnessed trajectory growth from what it used to be and we have been very careful at doing what we know how to do best. The first thing is that for every growth that you have seen, it has been market-driven; market-driven in the sense that when you know what your market needs are and you work towards meeting those needs, then you have carefully won the heart of your customers. What used to be in the past was that people would sit at the factories and do all kinds of research and developments. They bring up all manners of innovations and push it to the market. At the end, they find out the market does not need them and it then becomes a useless effort.

What has dramatically changed in the way we do things at Vitafoam is that we are now listening to our customers and because we listen to them, it makes the whole job easy. We do not benchmark ourselves with what is available in the market; we benchmark ourselves with global standards and what global standards said is that your product must be fit for a purpose. Every man going to the market has a purpose in his mind. If he goes there and the product aligns with that purpose, you have won the heart of the customer and I can assure you that behind all we do are research, resilient effort, and cohesiveness of our team working to achieve a common goal.

Beyond that, we listen to customers more than before and do not forget that the current economy we run now doesn’t give room for people to throw money around. Consumers are careful about what they spend their money on which must be fit for purpose for them to decide on how to spend their money. And when we talk about fit for a purpose, it means quality and that is the reason why consumer buys our products all over the marketplace.

Subsidiaries and group performance

I can proudly tell you that virtually all our subsidiaries are now in positive position. Even the one that used to be the ‘crying baby of the family’ has now turned positive. So you have from Vitablom, Vitavisco , Vitafoam Sierra Leone Limited, Vitafoam Nigeria and Vono. They are all contributing to the bottom line of the group. In the past, they used to take out of the purse but now, no matter how small, everyone of our subsidiaries contribute to the bottom line of the group.

However, it has taken us this long to be able to bring them to a point where they can be contributing. I tell you some of them, in not too distant future, they will be bigger than Vitafoam. In the wisdom of the creation of these subsidiaries at that time, they are now doing very well. Some of them now supply part of materials that we used for production in Vitafoam which was part of the reasons we set up the subsidiaries at that time.

Part of what that has contributed to profit of Vitafoam is the backward integration effort of the company. While others are running to Europe, other places to look for materials; those materials are manufactured by our subsidiaries and supplied to Vitafoam. When we are going to negotiating even the materials for production, you find out we are negotiating these materials from the point of strength. These are part of what we are benefiting from setting up these subsidiaries and they have been of tremendous help to the operations of Vitafoam.

How sustainable is the increasing dividend payout?

Our dividend payout is sustainable and you must understand that Vitafoam as a company does not do things by speculations. We take calculated risk and if you look at our performance, you will notice that it is highly sustainable. For years to come, our stakeholders will be smiling to the bank.

Beyond rigid foam

That is part of what we are trying to correct with a lot of our marketing activities recently. It is all about education. When people talked about Vitafoam, what usually comes to their mind is “from cradle to grave”. It was our payoff for so many years.

Now, it has gone beyond that and it is a fine art of living. In order words, you get more from just a mattress. We give you comfort, we make your life worth living then just giving a mattress to sleep on. It is the public enlightenment that we are working on for now. We are a household name for all your sleep requirements.

Your living environment can be enriched with Vitafoam products and we are now looking at your vehicles to provide comfort. We did a study and find out that in Nigeria there is currently no factory that produces oil filter and we have these numbers of vehicle in Nigeria. We are known for making life more comfortable for people and we have decided to make an investment in the production of oil filter. We have set up Vitapart Nigeria Limited to produce oil filter for our cars. Production has started and people are embracing it.

International recognition

In September 2021, a team of Journalists from British Broadcasting Corporation (BBC) Television were at Vitafoam to shoot films and interview some officials about one of the company’s products for global education on how sleep positions impact health.

The documentary was part of recognising and giving credence to what we do at Vitafoam. We did not influence them as they did their research and found out that it was Vitafoam that had what they need. They came around and did the documentary on one of our products. They educated the public that our sleep is important. What you sleep on is as the quality of sleep you get.

Rising share price on the stock exchange

If you are an investor, where will you put your money? It goes to confirm the confidence investors have in Vitafoam Nigeria. They have seen the trajectory that it has been on the increase. If I have money to invest, I will invest in such company because if you look at our performance over the last five years, there has been consistent growth. We continue to record growth and it has gone beyond marginal increase. Vitafoam is a share a lot of investors want to buy on the NGX. If you check  it out, there are always activities, but there is not always enough shares to buy because those who own those shares see the performance keeps appreciating and they also want to keep their shares.

Outlook for manufacturing sector

We expect growth in the economy in 2022 and as we have been told, all indicators are pointing towards the manufacturing sector as one of the key drivers of the overall economic growth.

The manufacturing sector over the years had been very quiet. But right now, what you find is that people have now settled in on how to price appropriately. As they price appropriately, they are now able to manage better their cost. In any case, it is a pre-election year, there will be more money to throw around and we are all going to benefit from it. The manufacturing sector is expected to be one of the drivers of the economy this year.

Nigerian stockbrokers have called on the United Nations (UN) to lead concerted discussions with the World Bank and other high-income countries to consider writing off sovereign debts of emerging and developing countries (EMDE) like Nigeria as a way to achieving sustainable solution to their worsened debt crises.

In a review and preview titled “The Nigerian Economic Review 2021 and Outlook for 2022”, Chairman, Research and Technical Committee of Chartered Institute of Stockbrokers (CIS), Mr Akeem Oyewale, who presented the report on behalf of the institute, said debt write-off , access to vaccines, political stability and key economic reforms are long-term sustainable solutions to lifting up emerging and developing countries, which poor economic conditions have been worsened by the COVID-19 pandemic.

According to the institute, creditor nations and multilateral agencies need to take a more sympathetic look at the debt problems of the emerging and developing economies because while debt restructuring was welcome, many of these debts will have to be outrightly repudiated to give effective succour to the debtors.

“We appeal to the United Nations, World Bank and the various developed and high-income countries of the world to give a more benevolent consideration to countries of the emerging and developing economy (EMDE)  bloc, including Nigeria, and grant them greater access to COVID -19 vaccines and palliatives. They should also consider writing off a significant portion of the countries’ sovereign debts as a sustainable solution to their worsened debt issues arising from COVID-19,” Oyewale said.

According to the institute, while inequality, unevenness and imbalance have been ever-present themes in global economic discourse throughout history, those issues became more obvious than ever in 2021.

“It was the consensus of economic analysts, going into 2021, that reactions to the COVID-10 pandemic, especially with regard to application of vaccines, would define the shape of the various sovereign economies during the year. That indeed was the case.

“While the developed countries started vaccinating their citizens in December 2020, the AstraZeneca / Oxford vaccine that was shipped to Nigeria was administered to its first beneficiary in March 2021; a time gap of over three months.

“Consequently, while 75 per cent of the population of high-income countries have so far been vaccinated against COVID-19, only seven per cent of the low income countries’ have,” Oyewale said.

According to the World Bank, extreme poverty rose in 2020 for the first time in 20 years, with about 100 million people now living on less than $1.90 a day. Following the unevenness in vaccine distribution, there has been a noticeable gap in economic recovery between high income countries and the low-and-middle income ones.

The World Bank has estimated that the global economy closed 2021 with the strongest post-recession pace in 80 years, an expansion of 5.6 per cent. However, within that overall cheerful scenario, the low income countries experienced a far less aggregate growth rate of 2.9 per cent which was their slowest in 20 years, excluding the COVID-19 influenced 2020.

According to the institute, the huge disparity between the two categories of economies was attributed in significant measure to the slow pace of vaccination in the low income bloc.

The report further noted that while the high income countries started to recoup their income losses of 2020, the low income countries continued to lose income in 2021 because most have not yet addressed the economic fundamentals.

Besides, international trade has been significantly disrupted to the advantage of the developed countries but the detriment of the poorer ones which depend substantially on trade to sustain their economies. Low and middle income countries had made significant progress in growing their share of global exports in the two decades prior to COVID.

“As would be expected, the delayed recovery and disruption in trade have exacerbated the debt situation for the poorer countries. So, while there are positive signs of recovery in Europe and North America, the poorer countries in Africa and Latin America will have to contend with shrinking national income, debt overdose, and social crisis caused by long closure of schools and unemployment,” the report stated.

In a comprehensive report, Oyewale identified the key drivers of the Nigerian  capital market in 2021 and the factors that will shape the economy this year with recommendations on how to put the economy on sound footing.

According to him, factors that will shape the economy this year include preparation for 2023 general election, government’s management of Omicron and COVID 19 effects, implementation of the Petroleum Industry Act (PIA) and National Development Plan, 2021- 2025 and financing of 2022 budget.

He said the biggest risk factor for the Nigerian economy in 2022 is the electioneering process leading up to the 2023 general elections as the financial markets may be at the receiving end of investors’ ‘wait and see’ attitude.

“The Federal Government, the Independent National Electoral Commission and the various political parties should act with spirit of fairness and tolerance; eschewing any act that may lead to violence in the run up to the 2023 general elections. The philosophy of building a private sector-led economy as enshrined in the National Development Plan should be strictly adhered to,” Oyewale said.

He advised that the commercialisation of the NNPC should be followed up with the public listing of its shares in the stock market, thus giving the average Nigerian citizen the opportunity of being a part-owner of one of the country’s commanding heights.

“In order to sustain the upbeat tempo of activity in the capital market, the CBN and banks in the country should take a more liberal position in granting trading facilities to securities dealing firms in the country.

“Further on market liquidity, pension Funds and other institutional investors in the country should significantly increase their investment in the equity market to create the much needed stability and galvanise further investment.

“Finally we call on the National Assembly to expedite passage of critical capital market Bills currently before them, to enhance market development and bring our market to par with the developed world,” Oyewale said.

He noted that events such as the demutualisation of the defunct Nigerian Stock Exchange to NGX Group and its listing on the market, 575 million ordinary shares offer for sale of MTN Communications Nigeria and regulatory action on FBN Holding were major catalysts for the market in 2021.

 

Nigerian Breweries (NB) Plc has allotted and listed a total of 78.93 million ordinary shares of 50 kobo each to shareholders of the company who elected to convert their cash dividends to ordinary shares.

The listing of the new shares on the Nigerian Exchange (NGX) increased the total issued and fully paid up shares of Nigerian Breweries from 7.997 billion to 8.076 billion ordinary shares of 50 kobo each.

The board of directors of NB had recommended the adoption of a dividend conversion option under which shareholders can exchange their cash dividends for ordinary shares of the brewing company.

The directors of the company then sought shareholders’ approval for the implementation of the conversion scheme, which applied to the cash dividend for the 2020 business year.

According to the resolutions, shareholders authorised that “shareholders entitled to receive cash dividends in respect of the financial year ended December 31, 2020, be offered a right of election to receive ordinary shares in the company instead of cash dividends, and that such new ordinary shares be credited as fully paid, which, when issued, shall rank pari-passu in all respects with the company’s existing ordinary shares”.

Shareholders authorised the directors “to allot to shareholders who elected to receive ordinary shares in the company in lieu of cash dividends, such number of new ordinary shares as shall be determined by the directors”  in line with the reference conversion price and amount of cash dividend presented.

The board of directors of NB had earmarked the entire net profit of N7.5 billion recorded in 2020 for payout to shareholders as cash dividends for the business year.

The company paid a final dividend of N5.52 billion in addition to an interim dividend of N1.999 billion earlier paid during the business year. With these, shareholders received a final dividend per share of 69 kobo in addition to 25 kobo earlier paid during the year, bringing the total dividend per share to 94 kobo.

 

The Institute of Export & International Trade (IOE&IT) has opened its first office in Africa with the announcement of a new investment and opening of its first international office in Nairobi, Kenya.

The opening of the office built on a successful 2021 in Africa where the IOE&IT delivered qualifications in Kenya, Ghana and Nigeria. The institute had worked with the International Trade Centres, along with the Ghana Export Promotion Authority and Nigerian Export Promotion Council (NEPC), as well as developing a Trade and Information Pipeline (TLIP) with TradeMark East Africa.

The institute hopes to leverage the new office in further developing training, education and consultancy offerings for the entire African continent – unique and specific to Africa-world trade and intra-African trade.

The opening of the office in Kenya particularly built on the Kenya-UK Economic Partnership Agreement. UK exports to Kenya in 2021 were worth £530 million and imports from Kenya totalled £579 million.

According to the institute, the TLIP project aimed at increasing trade for both sides and would help create greater visibility within supply chains and simplify the facilitation of trade between the UK and Kenya.

“The overall aim of the TLIP initiative is to reduce logistical time constraints for businesses by around 40 per cent, reduce the cost of compliance by 20 per cent- potentially worth an initial saving of up to £36 million to UK Exporters,” the institute stated on the sidelines of the second Africa Investment Conference (AIC).

Director-General, Institute of Export & International Trade, Marco Forgione said it was delightful to be opening the institute’s first office outside the UK in Kenya.

“It is a sign of how important we believe our work in Africa is and how much more important we believe it can be. Of course, the institute has always worked to support our members right around the globe but in opening up this new chapter we are sending a strong signal that we are there for members on the African continent and that we can help traders there to upskill their teams to trade in support of the AfCFTA as well as growing their trade globally. This investment in growing our presence in Africa especially our new base in the Kenya is central to this ambition,” Forgione said.

The Institute of Export & International Trade was established over 85 years ago to support UK businesses in growing their international markets and trade. The institute is regarded as the leading association of exporters and importers and it provides education and training to professionalise UK’s international traders.

 

Some minority shareholders of Champion Breweries Plc have kicked against the bid  by The  Raysun Nigeria Limited to take over the company 100 per cent, saying the Securities and Exchange Commission (SEC) is not doing  enough to protect investors in the nation’s  capital market. The shareholders have therefore written to SEC to stop The Rassun Nigeria Limited, which is subsidiary of Heineken Heineken N.V, majority owners of Nigerian Breweries Plc, from buying out the minority shareholders. The shareholders are asking that the company be merged with Nigerian Breweries as Heineken did with previous acquisitions it had in Nigeria.

SEC recently gave its approval to The Raysun Nigeria Limited to proceed  with the proposed Mandatory Takeover Offer (MTO) for 1,196,799,164 ordinary shares of Champion Breweries Plc  at N2.60 per share. These shares represent the remaining 15.3 per cent stake in the company that the Dutch brewery does not yet own.

However, in a letter to the Commissioner, Compliance, SEC, shareholders under the aegis of Progressive Shareholders Association of Nigeria (PSAN), are asking the MTO be stopped because it did not follow due process and it is in being done in bad fate with the intention to delist from the Nigerian Exchange Limited (NGX).

“The core investor has sought an MTO of the Champion Breweries Plc, which may result in the  eventual delisting  of its shares, a position we feel is detrimental to the interest of the minority investors.”

It is also our understanding that SEC approved the MTO without a tender paper indicating the approved buy-back price and other relevant details of the transaction.  In the same vein, the NGX’s free float regulations require a minimum local ownership which appears not to be obtainable in the current ownership structure. We would like to know what offence the minority shareholders have committed not to be invited to an extraordinary general meeting (EGM) where issues on the proposed MTO may have been adequately explained and due process followed to ensure that the interest of the common investor is protected,” PSAN  said.

The association, in the letter signed by its National Chairman, Mr. Boniface Okezie, said it would like to know why SEC  gave approve for  MTO  where minority shareholders’ interests are always at stake.

The shareholders lamented that the regulator is not doing enough to protect minority shareholders, a development, it said is causing low patronage of the capital market.

PSAN disclosed that the Champion Breweries Plc was revived through the efforts of the  minority shareholder, including the Akwa Ibom Government, but they about to be denied reaping benefits of their investments through the MTO.

They have therefore resolved that none of their shares, including the  11 per cent owned by Akwa Ibom State, would not be offered for sale to achieve the MTO.

“We rather propose that a merger between the company and any other suitable match would be a more reasonable approach as has been done in the past by the same core investor instead of delisting the company  shares. We request that shareholders be allowed to endorse a potential deal formally at an EGM where all stakeholder interests are represented. We have no issue with the core investor if they want to divest their investment, which there are at liberty to but we insist that the core investor desists from practices that are can endanger the fortunes of  other minority investors in the company,” they declared.