The Nation Newspaper

Category: Business

  • Presco’s share up by 96.08%

    Presco, one of the major players in the agricultural subsector, has grown its share value by 96.08 per cent from an opening figure of N8.67 to close the year at N17.00 per share.

    Speaking at the company’s end of the year party, its Managing Director, Mr Uday Pilani, said the company has been able to surpass 2011 records both in terms of product volume and turnover, from a turnover of N8.5 billion in 2011, adding that turnover for 2012 could exceed N11 billion.

    He expressed optimism that with the support of workers and the dynamic and excellent marketing strategy exhibited by the marketing team, there will be remarkable improvement in the year ahead.

    “We have in the course of the year acquired additional 3,200 hectares of land at the Ologbo Estate. Work is going on for the demarcation of the boundaries preparatory to 2013 planting season. The acquisition of over 14,000 hectares at Orogho/Obagie Nunuamen in Orhiomwon Local Government Area of Edo State will also be ready for occupation next year, also, we are in the process bidding for the takeover of the Edo State Government’s Uronigbe Rubber Estate and this will hopefully materialise early in 2013,” Pilani said.

    However, he pointed out that 2012 had been a very challenging year for the vegetable oil sub-sector of the economy, particularly due to what he identified as government’s policy on the importation of palm oil.

    According to him, the company was able to pursue its processing capacity and plantation expansion programmes as planned while the Bio-methenisation project which will ensure that it operates 100 per cent with green energy is very much on course and will be completed early next year.

    “Presco continues to create additional value for its products by regular investment. We are currently investing in pellet plant for the export of palm kernel cake, bottling plan for the sale of oil to retail customers and packaging plant. A palm kernel fractional plant, the first in Nigeria is also to be added in 2013, to make bakers fat.

    “There is, therefore ample opportunity for career growth and development for people who are determined, hardworking, committed and loyal and for those who are willing to learn,” Pilani said.

    He explained that the yearly event was a way of acknowledging the contributions of workers and rewarding excellence while it also affords the company the opportunity to socialise, take stock of its performance for the year and chart the course for improved performance in the New Year.

    At the event, over 22 workers were honoured for their contributions to the growth of the company over the years.

  • Operators attribute bullish run to retail, institutional investors

    Stockbrokers and investment pundits in the capital market have attributed the stellar performance of the market to renewed interest in the equities market by retail and institutional investors.

    Managing Director, Compass Securities Limited Mr Emeka Madubike, said retail and institutional investors increased their participation in the market to be part of the success story.

    Managing Director, Trust Yield Investment Limited, Alhaji Rasheed Yussuf, said investors were moving funds away from the money market because of the Sanusi’s remarks on the increasing debt stock.

    They said the growth followed decline in yields from treasury bills and government bonds.

    In separate interviews, the brokers said the new position of the Central Bank of Nigeria (CBN) to tackle inflation and rising debt profile contributed to the market growth.

    CBN Governor, Mallam Sanusi Lamido Sanusi warned the Federal Government to stop accumulating debts for future generations. He said the level of debt, if unchecked, could cause hardship for future generations.

    Yussuf said investors were also moving away from government securities to equities in anticipation of apex bank’s review of the monetary policies in 2013.

    He said opportunities in the market were enormous and that institutional investors were taking positions in the market ahead of 2013.

    Another stockbroker added that the reforms introduced into the market needed to be sustained for sustainable growth. He said there was the need for more investor education to increase local participation.

  • ‘Microfinance underfunding agric’

    ‘Microfinance underfunding agric’

    Securing financial services for agriculture has continued to be a challenge , a consultant to the World Bank, Prof.Abel Babalola Ogunwale, has said.

    Speaking with The Nation, Ogunwale, a lecturer in Agricultural Extension and Rural Development, Faculty of Agricultural Sciences, LadokeAkintola University of Technology, Ogbomoso, said the credit paradigm have failed because local farmers don’t receive credit from microfinance institutions.

    He said microfinance institutions (MFIs) have failed in providing sustainable microfinance services that contribute to resolving the agriculture credit problem by serving some of the rural poor.

    He said MFIs were created to serve poor farmers, but most have focused on urban and semi-urban clients in rural areas with high population densities.

    He said MFIs have limited their operations to areas with high population densities and farm loans usually represent a small share of their loan portfolios.

    Ogunwale urged the MFIs to provide credit to farmer associations if there is fear of default, adding that the associations will collectively guarantee one another’s repayment.

    He urged the government to assist in overcoming barriers to agricultural microcredit. Effectivedemand for credit by small farmers is limited by high transaction costs, risk aversion, and lack ofinformation and education, he added.

    President of the Lagos Apex Fadama Community Association, Abiodun Oyenekan, said microfinance institutions have not bben doing enough to finance small-scale agriculture.

    Many farmers need credit to purchase seeds and other input, as well as to harvest, process, market and transport their crops.

    According to him, the failure of microfinance to provide finance to farmers, has led to dearth of agricultural credit.

    The absence of rural banks or their unwillingness to meet credit needs of rural farmers largely account for the influence of informal lending institutions on agricultural production in the rural areas.

    He noted that here is little evidence that micro-finance has radically transformed the livelihoods of farmers.

    Meanwhile,watchers see this year as very promising to farmers as the N600 billion Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL) fund is expected to boost their agricultural produce.Furtherance to measures put in place to enhance financial inclusion in the country, the Central Banks of Nigeria (CBN) has set aside N600 billion for onward lending to smallholders farmers.

    Microfinance banks (MFBs), being a sub-sector that is close to the primary producers, processors and distributors of agricultural products, are recognised to participate in the distribution of the funds.

    In view of this, the National Association of Microfinance Banks (NAMB) South West zone has approved six cooperative societies to benefit from the agricultural fund of the Federal Government.

    The approved cooperative societies include Livestock Farmers Association, Tractor-Hiring Farmers Cooperative, Fish Farmers Cooperative, Agro-input Farmers Cooperative, Agro-processing Farmers Cooperative, and Cash Crops FarmersCooperative.chairman, NAMB, South West, OlufemiBabajide, said the six cooperative societies were carefully choosing, taking into consideration the role each of them could perform in agricultural and food production, stressing that NAMB was working with the aforementioned societies under the Support Farmers Initiative of the Federal Government.

    “The approved cooperative societies convince the association that they will be helpful in the disbursement of the fund,” he said, as the association has highlighted modality to disburse the fund, adding that the process of pairing them with MFBs has begun, and that by January, each of them will know which MFB it can go to access it. According to Babajide, the fund is meant to assist farmers to increase food production, as well as provide more jobs and grow the economy.

     

  • Recapitalisation will enhance values for shareholders, says Oando

    The success of the ongoing rights issue by Oando Plc would enable the company to optimise opportunities in its upstream business and deliver better values for shareholders.

    Its Group Chief Executive Officer, Oando Plc, Mr Wale Tinubu, said the successful outcome of the rights issue will position Oando to increase value for shareholders in the upstream through focused portfolio growth in production, cash margins and improved returns on capital deployed.

    He said directors of the company count on the consistent support of shareholders to seize the opportunity to take up their rights and benefit from the higher margin value creation the upstream offers.

    Oando Plc last Thursday started the process of raising N54.579 billion from the capital market following the opening of its rights issue of N4.548 billion, which took off on December 28 in Nigeria and to open on Thursday, January 4, 2013 on Johannesburg Stock Exchange (JSE).

    He said the recapitalisation was in the final stages in the execution of their overall strategy to increase their exposure to the upstream sector.

    “ In 2010 we raised N21.1 through a Rights Issue, it was a highly successfully event, as it closed 28 per cent oversubscribed and we look forward to a similar outcome in this exercise. We count on the consistent support of our shareholders to seize the opportunity to take up their rights and benefit from the higher margin value creation the upstream offers,” Tinubu said.

    According to him, the rights issue is in line with the company’s corporate strategy for balance sheet optimisation and the financing of growth initiatives in the upstream sector.

    According to him, pursuant to the recent signing of agreements by its affiliate OER with ConocoPhillips, to acquire their entire Nigerian asset base for $1.79 billion plus customary adjustments, OER will be transformed from a small size oil company to a midsize oil producer.

    The offer, being made at N12 per share on the basis of two new shares for every one share already held, is expected to close on February 6, 2013.

    Net proceeds of the offer would be used to repay part of N60 billion syndication loan used to acquire upstream assets and swamp drilling rigs among others.

    Specifically, the funds would be used to repay part of loan used to acquire upstream assets and swamp drilling rigs, part-financing of acquisition of upstream and midstream assets by Oando’s upstream subsidiary, Oando Energy Resources and investment in working capital to support increased level of business.

    Vetiva Capital Management Limited is the lead issuing house to the offer while FBN Capital Limited and FCMB Capital Markets Limited are joint issuing houses.

  • Fed Govt owes Lagos N51b

    Fed Govt owes Lagos N51b

    The Federal Government owes Lagos State over N51 billion for roads constructed and certified on behalf of the Federal Government in some parts of the state.

    The state Commissioner for Works & Infrastructure Dr Femi Hamzat made this known during an interview with The Nation in Lagos.

    He listed some of the roads as Funsho Williams and several others at the Central Business District (CBD).

    He urged the Federal Government to expedite the payment since the projects have been certified okay by its engineers.

    Hamzat frowned at the blocking of the proposed $600million loan from the World Bank by the Federal Government, saying that it smacks more of a political move than economical, especially as the state has been able to prove its mettle in upgrading its infrastructure and services to Lagosians.

    He said the achievement proves that the state government has used its funds in the best interest of its people.

    Asked what the state would do if the Federal Government does not okay the World Bank loan, Hamzat said the state would deploy its ‘plan B’ to go ahead with its provision of infrastructure and social services to the people.

    He, however, said there was no reason the loan request should not be granted.

    He stressed that there is nothing wrong with the proposed borrowing as far as it is put into good use and serviced.

    He added that the state has awarded the contract for the construction of Isheri Osun Bridge in the Jakande Estate, Isolo axis of the state to reduce the traffic snarl in the area, which is not only time consuming, but also affects the people.

     

  • U.S. stocks rise as Congress works to reach budget deal

    UNITED States stocks rose, after the big gest weekly drop for the Standard & Poor’s 500 Index in about two months, amid budget talks to head off more than $600 billion in spending cuts and tax increases slated to start tomorrow.

    Hewlett-Packard Co. and Caterpillar Inc. (CAT) jumped more than 2.3 per cent. Investors bought shares of companies most tied to economic growth, sending technology and material stocks at least 1.2 per cent higher. Facebook Inc. climbed 2.7 per cent after Bank of Montreal raised its rating on the company to outperform from underperform.

    U.S. Representative Chris Van Hollen, a Democrat from Maryland, talks about the negotiations to avoid the year-end fiscal cliff of automatic budget cuts and tax increases. He speaks with Peter Cook on Bloomberg Television’s “In The Loop.”

    The S&P 500 gained 0.8 per cent to 1,414.02 in New York. The Dow Jones Industrial Average rose 52.85 points, or 0.4 per cent, to 12,990.96 on Monday. Trading in S&P 500 companies was 11 per cent below the 30-day average at this time of day. U.S. exchanges are closed yesterday for the New Year’s holiday.

    “The fiscal cliff is the worse-case scenario, and if we have something better than that, then that’s a positive,” said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “I think we will get a deal. How do we sort that out and the tightening effect on the economy, that will be what the market responds to after the deal.”

    Stocks briefly pared gains as President Barack Obama said today that while a deal to avert the fiscal is “within sight,”the agreement was not yet complete. He said he was “hopeful”that Congress would reach a smaller agreement that prevents tax hikes and that the deficit can be tackled in stages.

    The White House and congressional negotiators have so far agreed to contours of a deal including tax cut extensions, with the remaining sticking point being how to handle automatic military and domestic cuts, according to an official familiar with the talks who spoke before Obama’s comments. Income tax cuts would be extended on families earning up to $450,000, the official said, with rates rising to 39.6 per cent on incomes above that.

    Progress picked up after a weekend of private talks and public sniping as lawmakers sought to avert more than $600 billion in tax increases and spending cuts that make up the so-called fiscal cliff.

    The S&P 500 (SPX) slipped 1.9 per cent last week, the most since November 9, amid concerns lawmakers weren’t making progress on a budget deal. The benchmark index has fallen 3.6 per cent after reaching the highest level since 2007 in September as Obama’s re-election set up a budget showdown with the Republican-controlled House of Representatives.

    The gauge has advanced 12 per cent for the year, extending the bull market rally to 109 per cent since March 2009, as financial stocks and consumer discretionary companies advanced more than 20 per cent. Gains in 2012 have been curbed this month, with the S&P 500 dropping 0.3 per cent. The loss is the worst December performance since 2007, when it fell 0.9 per cent, data compiled by Bloomberg show.

  • AMCON acquires equity stake in Starcomms

    AMCON acquires equity stake in Starcomms

    Assets Management Company of Nigeria (AMCON) has acquired a stake in the debt-ridden telecoms company Starcomms.

    As part of the deal with Capcom, the special purpose vehicle through which AMCON will have a share of Starcomms, both Helios Investment Partners, an African-focused private investment firm and AMCON, would acquire equity stakes in Starcomms derived from the Capcom shareholding on completion of the transaction.

    Addressing shareholders in Abuja at a court-ordered meeting on the acquisition, the interim Chief Excutive Officer of Starcomms Mr Olusola Oladokun said the acquisition became necessary because “Starcomms is facing operational and financial challenges on account of the shifting competitive landscape in Nigeria’s telecommunications industry.”

    The recent challenges, he added, “have resulted in the company generating operational losses and functioning with unsustainably high levels of debt and the reduction of weekly cash collections to unsustainable low levels.”

    As a result, the board decided to accept a proposal from Capcom to inject the much-needed capital and assets into Starcomms to facilitate a strategic turnaround and improve the competitive position of the company.

    To facilitate the investment, Starcomms’ shareholders endorsed a Scheme of Arrangement “to reorganise Starcomms’ share capital, subsequent to which the company will undertake the private placement for the subscription of new shares by Capcom.”

    Oladokun explained that Capcom is registered in Mauritius, saying the company was established by MBC, a private trust. “MBC has investment agreements in place with a number of investors, including Oldonyo Laro Estate limited, Helios Investment Partners and AMCON.”

    The commercial understanding that was captured in the investment agreement between Starcomms and Capcom, stipulates that the placing will entail Capcom contributing the investment consideration to Starcomms via the placing in exchange for such number of shares as will result in Capcom owning90.5 per cent of Starcomms’ share capital post-placing, he said.

    Starcomms has 6,966,963,378 shares in issue, thus implementing the placing without reorganising Starcomms’ share capital. The scheme would require that Starcomms issues 62 billion additional ordinary shares to Capcom under the placing.

    However, given the significant cost and time implications of increasing the company’s authorised share capital and issuing such a large quantum of shares, Oladokun and other members of the Starcomms’ Board, “proposed that the share capital of Starcomms be reorganised through a restructuring of the issued share capital of Starcomms, that will entail the transfer of the nominal value of the scheme shares from the share capital account to the Capital Redemption Reserve Account.”

    As a result, “shareholders of Starcomms’ ordinary share so restructured, shall retain one ordinary share with a nominal value of 50 kobo in Starcomms, credited as fully paid up for every 100 ordinary shares with a nominal value of 50 kobo each previously held.”

    Capcom will contribute assets, cash and other things. Capcom will also pay off Starcomms’ outstanding NCC obligations up to $13million in exchange for receiving the subscription shares and conditional share subscription rights.

    The investment assets that Capcom will bring to the table “comprise the entire issued share capital of Cyancom and HIP oils, which include the spectrum of MTS and the CDMA business of Multi-Links. The firm has negotiated conditional sale and purchase agreement with the vendors of the assets, namely AMCON and Helios Towers,” Oladokun said.

    Capcom intends to use a portion of the subscription shares it receives after placement to part-settle the consideration due to AMCON and Helios Towers for the investment assets. At completion, these assets will be transferred from Capcom to Starcomms via share transfer.

    Capcom will inject the investment cash into Starcomms to finance the integration of the spectrum of MTS and the CDMA business of Multi-Links, meet on-going short term losses in the business, pay key trade creditors and drive the new business plan.

    As part of the separate and subsequent underwritten Rights Issue, Starcomms is expected to receive a further $20million from shareholders, which will also be applied towards executing the company’s new business plan.

    Capcom proposes to raise the required funding for the proposed transaction from some sources, including $50million private placement of new equity in Capcom, in connection with which it had signed a backstop underwriting agreement with MBC, a private trust; debt financing from Afrexim and Diamond Bank Plc; and  the sale of certain assets in Multi-Links to Suburban, a major independent supplier of Internet protocol backbone services in Nigeria.

    Starcomms shares held by members of the Board would be subject to the scheme, but Capcom said it attached great importance to the skills and experience of the employees of Starcomms and expects them to play a significant role in implementing the business plan.

    To this end, Capcom has assured the Board of Directors of Starcomms that the employment rights and pension rights of Starcomms employees would be safeguarded on completion of the scheme and subsequent private placement.

  • NCAA to acquire safety equipment

    NCAA to acquire safety equipment

    Nigerian Civil Aviation Authority (NCAA) is set to deploy Aircraft Automated Flight Information Reporting System to improve safety.

    Its Director-General, Dr Harold Demuren, told reporters this in Israel, where he is on a pilgrimmage.

    Demuren said the new system would alert the authorities if there is any problem on board an aircraft, whether the aircraft is missing or not.

    He said: ‘’If anything happens on board, whether it is recorded or not, once it happens, automatically it would record on data based on hours and it would alert you that there is a problem and it would stream those data to us. Whether the aircraft is missing or not, you still get and see the data.

    “The good thing is that this data can be easily animated and you will see it in real life, how it happened, what occurred, so that there will be no speculation. You can log from it, you can learn from it and then correct it. That is all about that and that is the good news coming from us.’’

    He said aviation is safe, but regretted the tragic accident of June last year, involving Dana Air.

    “You must not forget that this is why we gave thanks to God that from 2006 to June last year , we have carried 50 million passengers, we have operated four million flights, not a single accident and then suddenly that accident happened.

    So our prayers and thoughts are with those families that lost their lives in that crash and those of the military helicopter, that God will grant all peace and joy.”

    On expectations for 2013, Demuren said: ‘’ My message to Nigerians, and expectations in 2013 as it relates to air safety, is to pray that the Lord God Almighty, our Lord Jesus Christ will bring perfect peace and safety in the air transport of Nigeria. It is very crucial; you have to remember that unless God builds the house, they labour in vain that build the house.

    “Unless God keeps the city, the watch men watched but in vain. It’s God that gives permanent safety and we pray God should use us as an instrument to give our travelling public a safe and accident-free aviation industry in Nigeria, and that is our prayer.’’

    On the recent call by the House of Representatives for his resignation, Demuren said: ‘’The National Assembly members are politicians; we are not politicians. We are professionals doing our job. The truth will come out and when it comes out, it will set everybody free.’’

  • Why local products suffer international acceptance, by UNIDO

    Why local products suffer international acceptance, by UNIDO

    For the nation’s local products to gain international acceptance, it must comply with the World Trade Organisation’s (WTO’s) agreements on Technical Barrier to Trade (TBT) and Sanitory Phyto-Sanitory (SPS), the Country’s Representative, United Nations Industrial Development Organisation (UNIDO) in Nigeria, Dr. Patrick Kormawa, has said.

    He spoke during a National Awareness Seminar on the programme, organised by the Federal Ministry Trade and Investment in partnership with ECOWAS and UNIDO in Lagos.

    He said the measure, which when implemented through the West Africa Quality Programme (WAQP), will promote international trade and boost the country’s economy.

    Kormawa said: “Awareness on the WAQP is key to international trade because without trading Nigeria-made-products, the country cannot grow economically.

    ”The aim of the programme is to foster compliance with International Trade rules and regulations, in particular the World Trade Organisation agreements on Technical Barrier to Trade (TBT) and Sanitory and Phyto-Sanitory (SPS) measures, through the establishment and strengthening of national and regional quality infrastructure for the entire West African region.”

    He identified poor product quality as a major challenge faced by member nations of ECOWAS when trading their products.

    ”We have to benchmark our food produce for the international market,” Kormawa added.

    Earlier, Chairman Steering Committee of WAQP, Dr. J. I. Odumodu said the awareness seminar on WAQP would improve quality of infrastructure in member states.

    Odumodu, who was represented by Mrs. Oluremi Ayeni, said it is aimed at making the nation’s exportable food-products acceptable in the European markets.

    National Technical Coordinator, NTC –WAQP, Dr. Joel Akinbolawa, said the programme specifically intervenes in five technical areas, namely: accreditation, testing, standardisation, inspection and quality management.

    The objective of the programme is to assist in the establishment of national and regional quality infrastructure and to contribute to greater regional market integration and increased participation of ECOWAS countries and Mauritania in international trade.

    “As key stakeholders in the promotion and provision of quality products and services, It is crucial to sanitize them on the activities and achievements of the WAQP for a better understanding of the issues, processes and services so as to enable their greater participation in the promotion and protection of consumers and market partners’ interests”

  • Etihad Airways records 10.29m passengers

    Etihad Airways has surpassed its target of carrying 10 million passengers in 2012 and is set to achieve a 22 per cent increase on the total of 8.41 million passengers for 2011.

    The increase averaged 10.29 million, representing an extra 1.88 million passengers travelling on the carrier’s global network that covers 87 of its own passenger and cargo destinations, and 245 codeshare destinations.

    The passenger growth for Etihad Airways is mirrored by its equity partners. By the end of 2012, airberlin is expected to have carried 33.4 million passengers, Virgin Australia 19.5 million passengers, Aer Lingus nearly 11 million passengers, and Air Seychelles 241,000 passengers.

    Etihad Airways and its equity partners will have collectively carried more than 74 million passengers in 2012, with cooperation between the five airlines greatly contributing to passenger growth.

    An example of the success of this cooperation is the 300,000 passengers Airberlin and Etihad Airways have delivered onto each other’s networks during the last 12 months.

    Etihad Airways’ President/Chief Executive Officer, James Hogan, said: “Etihad Airways has achieved significant expansion in 2012 and therefore it’s very satisfying to pass our target of flying more than 10 million passengers during a year for the first time.

    He said: “We have launched flights to six new destinations during the last year, including Tripoli, Shanghai, Nairobi, Basra, Lagos and Ahmedabad – which have contributed to the 22 per cent increase in passenger numbers.”