The Nation Newspaper

Category: Business

  • Fed Govt, Brazilian firm partner

    The Federal Government and Embraer, Brazil, have agreed to collaborate to facilitate government’s effort to assist domestic airlines acquire new aircraft.

    This is the outcome of preliminary talks opened in S.J. Dos Campos, the headquarters of Embraer in Brazil, on the subject matter by representatives of the Federal Ministry of Aviation led by the Managing Director of FAAN, Mr George Ureisi and Embraer led by the Senior Vice President Operations/Chief Operating Officer, Mr Luis Carlos Affonso.

    Ureisi told the Embraer executives that the Federal Government has altered its strategy for the development of the aviation sector to domestic airlines by its intention to assist them increase their fleet with new aircraft from reputable manufacturers.

    He emphasised the need for the use of aircraft by domestic operators, hence the need for the government to intervene in the acquisition of aircraft that are efficient.

    “Domestic carriers use wrong equipment for most of their operations. There is no established record of sustainability for these airlines mainly because of the use of wrong equipment. Intervention fund by the Federal Government in the past to assist them re-fleet has failed because there was no evidence of the money being ploughed back into the airlines leading to them failing in the long run.

    “The government wants to change this model entirely by floating a fund for the acquisition of new aircraft for the domestic carriers. In this regard, the government is seeking a partnership with Embraer that would lead to a discussion on how these new aircraft would be procured at very competitive, fair, and concessionary rates,” Ureisi told his hosts.

  • NSE looks for first IPO for primary market

    The Nigerian Stock Exchange (NSE) is looking for a major initial public offering (IPO) that will signal the beginning of recovery at the primary market.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, said the floatation of an IPO by one of the prospective issuers would send a message about the full recovery of the capital market, with the resume of activities at the primary market complementing robust recovery at the secondary market.

    He said NSE has engaged several quotable companies for the benefits of listing their shares on the stock market, adding that there were prospects for new listings in the period ahead.

    The Nation’s investigation had earlier shown that many companies that had shelved plans to raise new capital from the capital market due to the lingered recession have restarted discussions about prospects of accessing new equity funds from the market.

    Investment banking sources said there were indications of renewed interests in the new issue market following sustained recovery in the stock market, which has seen considerable restoration of equities’values and investors’confidence in recent period.

    They indicated that ongoing discussions could lead to making a debut of early new issues in the market around the first half of 2013 if the market sustained its ongoing recovery.

    Market sources said though the talks were still not definitive, the discussions pointed to imminent rebound of the new issue market.

    From a whooping N1.3 trillion in 2007, the recession that started in 2008 had withered enthusiasms for new issues, especially equities, as new issues dropped to about N86 billion in 2009. It has since declined consecutively with the few new equity issues in recent years largely rights issues motivated by large core investors seeking to recapitalise their companies.

    Companies were, however, said to be considering that the positive sentiments from the secondary market recovery would impact on new equity issues.

    Reports by boards of directors of several companies had indicated that firms were constrained by their inability to source new equity capital due to the melt down at the capital market while recourse to high-interest bank loans depressed probable returns to shareholders.

    Reports by quoted companies highlighted the twin-problem of high cost of fund and liquidity squeeze on corporate earnings.

    Several companies had earlier indicated plans for supplementary equity issues and initial public offering (IPO) but suspended the plans due to what they described as unfavourable situation at the primary market.

    Not less than 11 companies had earlier indicated interests in raising new equity funds. These included companies such as Cement Company of Northern Nigeria (CCNN), May and Baker Nigeria, Fidson Healthcare, RT Briscoe, DN Meyer, Nigerian Aviation Handling Company (Nahco), Lafarge Wapco Cement Nigeria Plc and UACN Property Development Company (UPDC) Plc.

    Two prospective new listings – Promasidor Nigeria Limited and Notore Chemical Industries Limited – had also mulled plans to float IPOs.

    Many banks were said to be considering proactive fund-raising plans to boost their lending capacity and forestall adverse impact from global and domestic regulatory changes.

    Many banks have subsisting shareholders’ resolutions to raise new funds through equity and debt issues.

    Most of the companies had already intimated shareholders of the necessity of accessing new funds while many have started and completed some key steps in the new issue process.

    While some of the companies plan to use net proceeds of their offers for business expansion, most of the companies would use the funds to restructure their balance sheets by reducing bank loans and providing additional working capital to support long-term growth.

    Already, CCNN had secured shareholders’approval to raise N45 billion.The company had received approval to raise N15 billion each through rights issue, public offer and a rights-based secured convertible debenture issue.

    This implied that the company would be seeking to raise up to N30 billion from existing shareholders while new investors and existing shareholders would contribute N15 billion.A secured convertible debenture would give opportunity to debenture holders to choose to convert their holdings to ordinary shares at a later date.

    Notore plans to raise more than N160 billion.The net proceeds from the IPO would be used to finance a brand new fertiliser plant, with a conservative estimated cost of $1 billion. The new fertiliser plant was part of the company’s expansion programme, which aimed to build new capacity to support the current attainable capacity of the existing plant of 750,000 metric tonnes.

    CCNN was planning to raise funds to finance expansion while Promasidor plans to use net proceeds of its IPOs to partly finance its new factory.

  • Terrorism: Demuren seeks more scrutiny for cargoes

    To stem terrorism in aviation, cargo operations should be given serious surveillance, the Director-General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, has said.

    Demuren, who was represented by NCAA’s Director of Aero-medical Services, Theressa Bassey, spoke at the Air Cargo Security and Safety Breakfast Meeting organised by Aero Consult Limited in Lagos.

    He, however, said the government was addressing the problem to ensure safety.

    Demuren said since the volume of cargoes on passengers’aircraft has increased, there was the need by the authorities at the airports to adopt counter measures to make it difficult for terrorists to access passengers.

    Also, the President, the Association of Foreign Airlines and Representatives in Nigeria (AFARN), Mr Kingsley Nwokoma, has decried inadequate security at the airports, especially in restricted areas.

    He explained that the security personnel were inadequate to monitor restricted areas, such as the airsides, adding that most touts break walls to gain access to the airports.

    Nwokoma challenged the government to increase security at the airports to safeguard goods and cargoes.

    The Chairman of Aviation Round Table (ART), Dele Ore, also said to prevent terrorists from putting explosives on the aircraft, there was the need to use the cargo screening technologies aimed at detecting explosives.

    He said in addition to a cargo screening technology, a cargo container technology is being considered to mitigate the threat of explosion or fire that finds its way to an aircraft undetected.

    Meanwhile, Demuren has identified the dearth of adequate personnel and insufficient training to meet industry’s demand as some of the major challenges affecting the growth and development of the global aviation industry.

    Besides, he noted that statistics have shown that in the next 20 years, more than a million pilots, engineers, technicians, cabin crew and air traffic controllers would be required to keep the global aviation industry running.

    The NCAA boss disclosed these at the Women in Aviation annual conference in Lagos.

    He explained that if the aviation industry must remain the safest and most desired means of transportation, efforts must be made to fix the gap in manpower need as a large percentage of the available skilled aviation professionals is ageing and would soon retire from service.

    Demuren noted that the demand for skilled professionals would exceed supply in the future because of the wholesale retirements in the generation of professionals, as well as unattractive nature of professions to potential candidates.

    He listed other factors that may shape developments in the sector to include competition with other industry sectors for skilled employees, and training capacity, which he noted is insufficient to meet demand.

    The NCAA boss said statistics reveal that a major percentage of skilled professionals in Nigeria are above 50, raising fresh concerns that if the dearth of professionals was not addressed, it could have negative impact on the industry.

  • Kenya searches for more oil

    Despite the May 7 announcement of a large oil deposit in the remote northern Turkana region, discovered by the British oil and gas firm Tullow Oil PLC, Kenya, Kenya Information Secretary, Ezekiel Mutua, said his country is in search of more oil resources to boost economic growth.

    Speaking with reporters, ahead of the African Futures Conference, which has begun in Lagos, Mutua said the government would ensure that the discovery of oil brings prosperity to Kenyans and eschew “resource curse” that has characterised some oil producing nations.

    He said the Kenya government would ensure that money gained through oil is used to promote development, adding that the government was supporting increasing exploration and drilling activity

    According to him , there is still much more exploration work to be done and discovery of oil is important for more than just national pride but for economic development.

    Handling expectations,he explained is not easy, especially with Kenya preparing for elections in March 2013.

    The discovery of oil was “good news” for Kenya, which spends millions of dollars in oil imports. Kenya spent US$4.1 billion on oil imports, which is equivalent to 100,000 barrels per day in 2011, according to reports. The government had expressed “cautiously optimistic” over commercial viability of the oil find. Thirty-one wells have been drilled across the country over the past few years, all of them turning up dry, so this caution is reasonable.

    Mutua said his government is in support of convening the African Futures roundtable event in Lagos, because of the potential for economic growth the continent.

  • ‘Equities will sustain bullish ride to 2013’

    Managing Director, Investment One Financial Services Limited, formerly GTB Asset Management Limited (GTBAM), Mr Nicholas Nyamali, has predicted that the bullish rally at the stock market would sustain through to the 2013 as investors continue to reflect improving fundamentals of quoted companies.

    He projected that average full-year return for the stock market in 2012 could close between 27 and 30 per cent just as the market would witness additional capital appreciation in 2013, especially in the immediate months after the first quarter reports, which are expected to be largely impressive.

    According to him, the year-to-date return of the market, which stands slightly above 27 per cent, is still normal considering the long-drawn declines in share prices of several companies in spite of continuous improvements in fundamentals.

    He noted that improvement in the fundamentals of quoted banks would provide further impetus for capital appreciation in 2013 citing the dominance of banks on the capitalisation and activity charts.

    “The market has been highly undervalued for several years; we must understand where we are coming from. So, we expect the market to continue to reflect corporate results in the months ahead,” Nyamali said.

    He, however, urged investors to learn from the experience of the past and solicit for adequate investment report and education before making their investment decisions.

    According to him, the main problem behind the market recession was fundamentally due to lack of investment knowledge as people were just not looking at the operational results and earnings of stocks in consideration for their share prices.

    Nyamali, who led the management buy out (MBO) of GTBAM when Guaranty Trust Bank Plc decided to sell its wealth and investment management subsidiary to comply with new banking regulatory regime, reiterated the commitments of Investment One to investors’ education.

    He said while the company would provide investment services and products that it would bill clients for, it will also maintain a parallel commitment to providing not-for-profit investment services including advisory services aimed at inculcating savings and investment habits in Nigerians and empower the generality of the people.

    He pointed out that in spite of the change of name to Investment One Financial Services Limited, the company remains essentially the same good old wealth management firm known for its excellent services and products.

    According to him, the company remains the same in terms of human resources, technologies, vision and values that have been its guiding light since its formation as a subsidiary of GTBank.

    “The name ‘Investment One’ mirrors our desire to be a one-stop shop for comprehensive investment services and the first point of call for insightful and innovative financial solutions. The name also reflects the firms’ strategic positioning as a service-oriented firm that is responsive to the investment needs of its customers,”Nyamali said.

  • ‘BA’s investment programme delivering customer benefits’

    With just two years into a five-year £5 billion programme of investments, British Airways has already reached some significant milestones, chief executive, Keith Williams, has said.

    He told customers in Lagos that the airline has expanded its network, which now includes new African routes.

    Besides, he said BA is acquiring new aircraft, enhancing products and introducing innovative technology to better serve its customers.

    “As a result of acquiring bmi, British Airways now serves 19 routes in 16 African countries. It flies more often to more places in Africa than it has ever done since it first opened routes to the continent 80 years ago.

    “The acquisition also enabled it to grow its overall route network, giving customers access to 20 more destinations. British Airways is now operating the biggest Heathrow schedule in its history. Together with its franchise, codeshare and oneworld partners it offers a global network of over 600 destinations,” he added.

    Williams said that new aircraft, such as the Boeing 777 ER are comingonto the fleet, embodied with new World Traveller Plus and World Traveller cabins and a sophisticated in-flight entertainment system which offers nearly double the previous choice.

    “We are making improvements in every cabin. The rollout of our new First is nearly complete. Bringing together balanced privacy, comfort, space and contemporary British design, it draws on the airline’s heritage, focusing on quality and attention to detail,’’ he said.

    In May 2013, he said BA will take delivery of our first Boeing 787 Dreamliner and two months later, its first A380 superjumbo. “These new aircraft will enable us to further develop and grow our net

    work, achieve considerable fuel savings compared to the aircraft they replace, and bring the outstanding 777-300 levels of customer comfort to a wider audience,” he said.

    More than a million customers have now downloaded British Airways apps, which make the check-in process faster and more convenient. A feature for iPhone users now also enables them to book their flights from their phone.

    The Nigerian market is such an important one for British Airways that we are pleased to offer our new OnBusiness members in Nigeria a welcome gift of 1,000 OnBusiness points if you join before November 30.

    “Nigeria was the first market outside of the UK where we launched our new advertising campaign: To Fly.To Serve. Through our programme of investments and product and service enhancements we’re making that brand promise a reality,” said Williams.

  • Nigeria may miss Vision 20: 2020 target, says NESG

    Nigeria may miss Vision 20: 2020 target, says NESG

    • Jonathan seeks transparency in oil sector

    Nigeria may miss the primary target of being one of the world’s top 20 economies by 2020 unless it significantly accelerated reforms and pace of economic growth to cover a whooping gap of about $730 billion.

    This was one of the highpoints of the Nigerian Economic Score Card presented yesterday at the ongoing Nigeria Economic Summit (NES) in Abuja by the Director-General, Nigerian Economic Summit Group (NESG), Mr Frank Nweke Jr.

    Minister of National Planning, Dr. Shamsuddeen Usman, however, said the Vision 20: 2020 was not a prediction but an inspirational roadmap towards attaining improvement in Nigerian economy.

    According to him, irrespective of Nigeria’s position by 2020, substantial progress would have been made by 2020 given ongoing reforms.

    After extensive review of the economic achievements, reports, goals and global and domestic scenarios, Nweke said Saudi Arabia would likely beat Nigeria to become the 20th largest economy in the world by 2020, with a GDP of US$1.2 trillion in purchasing power parity (PPP).

    Also, President Goodluck Jonathan yesterday vowed to ensure transparency and accountability in the oil sector and prosecute those involve in the oil theft.

    Deregulation, he said, must be followed with views of Nigerians.

    Jonathan, who was represented by the Vice-President Namadi Sambo at the 18th Nigerian Economic Summit in Abuja, said: “We must deregulate totally. This is the best answer. We believe that Nigerians will come to realise what we mean by deregulation. We are not in the right economic position. And the best way is to open up and deregulate the oil and gas sector. The blueprint and the transformation agenda of Vision 20: 2020 are living testimony of this collaboration.

    “The cost of governance and the Nigerian economic prospect capture the essence of our transformation agenda. The goal is to work on the critical sector of the economy that will accelerate job and wealth creation in our country. This same captures our commitment to good governance and efforts to full realise our huge economic potential.

    “In keeping with my promise two years ago. The recommendation of the last economic summit were received and considered by the Federal Executive Council (FEC) as potential imputes into government’s policy framework.

  • Senate, House query N58b SURE-P funds for foreign contractors

    Senate, House query N58b SURE-P funds for foreign contractors

    •N2.2b spent on secretariat services

    • Travel bills hit N75m

    The joint Senate and House of Representatives Committee on Petroleum (Downstream) yesterday queried the N58 billion the Subsidy Reinvestment and Empowerment Programme (SURE-P) paid foreign railway contractors in four months.

    The joint committee also questioned the N75 million SURE-P claimed to have spent on local travels in four months.

    The lawmakers were also uncomfortable with the N2.2 billion claimed to have spent on secretariat services between July and October 2012.

    The issues were raised when officials of SURE-P led by Chairman of the programme, Dr. Christopher Kolade, appeared before the joint committee to defend the 2013 budget of SURE-P.

    To start the session, Chairman, Senate Committee on Petroleum (Downstream), Magnus Abe, said the desire of the lawmakers was to understand where the SURE-P was heading to.

    He noted that the fund allocated to SURE-P was not the ordinary crude oil money to be shared by individuals, saying nobody should take questions by members of the committee personal, as it was incumbent on them to explain to their constituents the utilization of Federal Government funds

    Kolade explained that whatever they do under the programme is based on transparency, probity and accountability.

    He said there was no reason for them to hide information on what they are doing.

    A member of the committee, Senator Benedict Ayade, wondered why the SURE-P paid N58 billion to multi-national contractors on rail line projects. The lawmaker from Cross River North also questioned the N75 million spent on local travels in four months.

    He said the implication of paying foreign contractors N58 billion in four months was that the money would have been transferred out of the country.

    Ayade said: “I though that the philosophy of SURE-P is creation of jobs for Nigerians. Now that major contracts under SURE-P are done by multi-national contractors, how will SURE-P achieve its philosophy and objectives?

    “Is the philosophy of SURE-P no longer empowerment of Nigerians?”

    Ayade also said it was obvious that SURE-P projects are not evenly distributed across the states, adding that “SURE-P is just going the way of other Nigerian committees.”

    He said money was being recklessly pumped to multi-national companies in the name of fighting unemployment, wondering why SURE-P has taken over the functions of Primary Health Centres in the country.

    The committee wanted to know what the Ministry of Work is doing when SURE-P has taken over payment of contractors.

  • Sacked Shell workers: NUPENG, PENGASSAN plan strike

    Sacked Shell workers: NUPENG, PENGASSAN plan strike

    The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has found an ally in its senior staff counterpart- the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) in its plan to go on strike this week.

    In a statement, PENGASSAN informed the government and the public of its determination to join NUPENG in every protest and action to be undertaken should the Shell Petroleum Development Company (SPDC) management fail to recall the sacked NUPENG members as directed by the Minister of Labour and Productivity, Chief Wogu

    In the statement signed by the National Publicity Secretary, Comrade Zaid Kolawole, the union said the industrial actions will be jointly planned under the NUPENGASSAN platform to ensure that Shell complies with the Minister’s directive. The Minister had during a mediation meeting between NUPENG and Shell, directed that the sacked workers be recalled before December 4, 2012.

    In the statement, PENGASSAN alleged that information reaching the union was that Shell management was contemplating circumventing the directive by the Minister of Labour and Productivity by planning that the affected NUPENG officers and members shall only be recalled to their jobs from which they were unjustly disengaged, as casual workers.

    This, PENGASSAN said, is totally unacceptable to both NUPENG and PENGASSAN as it is repugnant to the principles of natural justice and decent work.

  • Nigeria, US to boost economic, bilateral trade ties

    Nigeria and the United States yesterday renewed their commitments to increase economic, trade and investment relationship between both countries, especially in non-oil exports.

    The Minister of Trade and Investment, Olusegun Aganga, said given the current global economic meltdown, trade and investment remained the only potent tool for achieving sustainable and inclusive economic growth globally.

    Aganga, who spoke at the Seventh US-Nigeria Trade and Investment Agreement Council Meeting in Abuja, said there was a need for Nigeria and the US to deepen their trade and investment relations, especially in the areas where both countries have comparative and competitive advantage.

    The US-Nigeria Trade and Investment Agreement (TIFA ) was signed in 2000. It established the framework for structured dialogue on Trade; Intellectual Property Rights; flow of investment, as well as partnership for cooperation between the economic operators of the two countries.

    Aganga said: “All over the world, presidents and policy makers have agreed that there is only one tool that can lead to sustainable and inclusive economic growth. That tool, is trade and investment.