The Nation Newspaper

Tag: firms

  • Stock Exchange warns 62 firms

    Stock Exchange warns 62 firms

    • ‘Subsisting deficiencies in companies’ books’

    Authorities at the Nigerian Stock Exchange (NSE) have placed 62 companies under caveat with various tags, drawing investors’ attention to underlying inadequacies in their operations.

    A list of the companies marked out for corporate governance issues by the NSE indicated that the 62 firms have subsisting deficiencies, representing about 35 per cent of the 178 companies listed on the three tiers of the Exchange.

    Several high-profile companies in the banking, oil and gas, consumer goods, insurance, construction and services sectors, among others,were among the stocks placed under the corporate governance watchlist of the Exchange.

    Eleven companies with free float deficiencies, thus susceptible easily to price manipulations, were flagged as below listing standard. These included Union Bank of Nigeria (UBN), Capital Hotel, Great Nigerian Insurance, Chellarams, Nigerian Ropes, AG Leventis Nigeria, Interlinked  Technology, Infinity Trust Mortgage, Transcorp Hotels, Caverton Offshore Support Group and African Paints.

    Also, a group of seven stocks with persistent records of poor corporate governance compliance were categorised as delinquent, in relation to their records of missing regulatory filing deadline. These companies included Omatek Ventures, Roads Nigeria, Multi-Trex Integrated Foods, Aso Savings & Loans, Ekocorp, Ikeja Hotel and Union Homes and Savings Plc.

    Besides, 10 companies are  undergoing delisting, including Costain (WA), Deap Capital Management, Evans Medical, International Energy Insurance, Lennards (Nigeria), PS Mandrides & Company, Premier Breweries, Navitus Energy, MTI, Mtech and Nigerian Ropes. Companies under this group have already been served with all regulatory processes for delisting and their delisting have been approved by the national council of the Exchange.

    Not fewer than 12 companies are also under the watch list and had been given timelines for restructuring of their operations. These included Afrik Pharmaceuticals, Union Dicon Salt, Anino International, African Paints, Goldlink Insurance, UTC Nigeria, Thomas Wyatt Nigeria, Nigerian German Chemicals, Golden Guinea Breweries, FTN Cocoa Processors, Beco Petroleum and Unic Insurance.

    The report also flagged eight banking, mortgage and insurance companies, which results are undergoing the scrutiny of the financial services regulators. These included four banks-Zenith Bank International, United Bank for Africa, Stanbic IBTC Holdings and Guaranty Trust Bank Plc; three insurance companies-Mutual Benefits Assurance, Linkage Assurance and Guinea Insurance and a mortgage firm, Resort savings and Loans.

    Other tagged companies included African Alliance Insurance Company, Austin Laz & Company, Beco Petroleum Product, Conoil, Daar Communications, E-Tranzact International, Fortis Microfinance Bank, MRS Oil Nigeria and Skye Bank.

    The report highlighted the Compliance Status Indicator (CSI) of the quoted companies on the NSE, an initiative aimed at forewarning investors about the status of a particular company in order to ensure investors act with full information and understanding of the inherent risks.

    Nigerian Stock Exchange (NSE) General Counsel and Head of Regulation, Ms. Tinuade Awe, had explained that the enhanced tagging was part of efforts to further improve market transparency and integrity by providing timely information for investment decisions as well as enhance the protection of investors in the capital market.

    “This initiative of the Exchange which is in line with global best practices, is designed to maintain market integrity and protect the investors,” Awe said.

  • ‘How firms can take advantage of economic downturn’

    Price Waterhouse Coopers (pwC) Nigeria has listed steps businesses can take to minimise the effects of economic downturn and position their organisations to emerge stronger.

    The professional services firm enumerated these at a breakfast meeting held in Lagos for business leaders and executives. Its theme was “Preserving Value in Challenging Times.”

    According to PwC, the Nigerian economy is facing several challenges largely due to declining global oil prices, which resulted in a scaling back of public spending, uncertainties around the exchange rate, double digit inflation and a reduction in Gross Domestic Product (GDP) growth.

    The International Monetary Fund (IMF) has also slashed its growth forecast for Nigeria, stressing that a combination of plunging oil revenues and weakened investor confidence will push the economy into recession. According to the IMF, Africa’s largest economy is expected to contract by 1.8 per cent this year. This situation has negatively impacted the financial performance of most businesses as many struggle to remain afloat.

    However, PwC believes that there is an opportunity for companies to turn their challenges into opportunities. They noted that the most successful businesses during challenging times are those that react the quickest, take tough decisions early and lead rather than follow.

    Kwabena Asante-Poku, a partner in PwC Nigeria’s Advisory Deals practice, said: “Effective managers must consider the effects of the downturn and what it means for their business and its survival. Then, they should address the key questions – what do we need to do differently, what do we need to do better? Often the secret of survival will be getting the simple things right rather than embarking on wholesale radical change in every aspect of their operation.”

    The firm advised that businesses must first understand the true impact of the downturn on their operations and subject their assessment to stress testing and scenario planning. This knowledge is critical to coming up with a new strategy.

    Asante-Poku further said they should identify unprofitable products and customers and determine effective future working capital for the business. Also, businesses, he said, need to implement cost reduction strategies especially by targeting discretionary expenditure, separating the essential from the desirable while limiting outgoings.

    Seyi Akinwale, an Associate Director in PwC Nigeria’s Advisory Deals practice, said: “Strategic interventions that can help companies preserve value include Strategic Alternatives and Business Planning, Operational Improvements, Review of Contractual Obligations, Liquidity and Cash Management, Refinancing and Recapitalisation, Turnaround Management, Carve-Outs and Exit Management.”

    In addition, PwC advocates that corporates and their bankers explore the use of informal restructuring workouts to preserve shareholder value and reduce the required specific provisions for non-performing loans. These informal restructuring arrangements between creditors and debtors will prevent greater loss and through this, the banks can work with the distressed debtors to resolve financial difficulties that would otherwise likely lead to liquidation.

    Akinwale also said: “Informal arrangements include any out of court restructuring arrangements and these are critical given the absence of adequate insolvency laws with provisions to govern business restructuring in Nigeria. These informal workouts serve as a timely alternative to recovering funds loaned to borrowers and ensuring the survival of businesses.”

    He also stated that avoiding bankruptcy of potentially viable businesses helps to prevent job losses and can be a driver of economic recovery.  “Formal insolvency proceedings in court often delay the turnaround process, can be expensive or can end up being more complex due to the adversarial nature of the judicial process. It is therefore, in the interest of both the borrower and its bankers to utilise and adopt informal out-of-court restructuring solutions,” he said.

    Other strategies, which the firm outlined, include maintaining an experienced and well-resourced finance team, proper and careful tax planning and ensuring effective performance management and forecasting. It also said companies should ensure appropriate and sustainable financing arrangements and communicate constantly with stakeholders.

    Asante-Poku concluded saying that “in a downturn, numerous difficulties present themselves, all important and urgent. A natural response may be to batten down the hatches and focus solely on the immediate problems of the day.

    “Prudent management is of course necessary but it is also important to recognize the opportunities presented, to challenge old ways of doing things, to take advantage of weaker competitors and plan for the changed market place that will emerge. Effective management and taking the right decisions will help business emerge through the bad times re-energised and fit for the future.”

  • Firms proffer solution to tomato disease

    Two firms,  Russell IPM United Kingdom and Agronet Nigeria Limited,    have  launched an effective and sustainable solution to combat the tomato disease-Tuta Absoluta.

    In a statement, the  firms  said the three-component system, based on beneficial soil microbes and biopesticides, work in synergy to destroy both larvae and adults of Tuta, boost the plant’s defence and promote  growth in a safe and sustainable way.

    Together with Agronet Nigeria Ltd, Russell IPM conducted field demonstrations to show farmers how they can use the products and gain complete control over the pest.

    According to the statement, local farms using Russell IPM’s Recharge, Antario and Biotrine systems have noted a significant reduction in Tuta population and tomato damage. The product has been demonstrated at Tenti Farms, a   25 hectares of greenhouse farm based in Jos,Plateau  State where tomatoes and peppers are primarily grown.

    Head Agronomist at the farm, Odunayo Orowumi,  said: “In the past, our farm has been devastated by the Tuta absoluta pest and despite trying a number of conventional pesticides, the moth caused complete losses in our greenhouses.”

    After seeking the help of Agronet, a local agricultural and consultancyservice, they began applying the Russell IPM solution within their greenhouses.

  • Dogara: NSE listing must for firms

    Dogara: NSE listing must for firms

    The Speaker of the House of Representatives, Yakubu Dogara, has said firms operating in the country must list their businesses on the Nigerian Stock Exchange (NSE).

    Speaking while receiving members of the Capital Market Master Plan Inplementation Council in his office, he said the House of Representatives is willing to provide all necessary support, through legislations, incentives and any other instruments to compel all major companies in the country to get listed on NSE.

    He said: “One of the deepest issues that we have to address is that of value that is being created and completely taken away by corporations. In other words, in some jurisdictions, they refer to it as corporate greed; where many companies are generating value investing in Nigeria, reaping profits but you find out that nine people will sit and just share billions of profit. I’m not exaggerating, it is happening right now in Nigeria and I am glad you listed one of them.

    “But by listing in the NSE, it even helps in the income improvement of the ordinary citizen because they can invest in that company and whatever profits the company makes goes round and that reflects on the economy. But that is not what is happening.”

    The Speaker, however applauded the council for being focused and having a vision and plan for moving the NSE ahead, adding that if democracy cannot deliver goods to Nigerians, then democracy is on trial.

  • Naira firms to N366/$ as speculators release cash

    Naira firms to N366/$ as speculators release cash

    The naira yesterday strengthened to N366 against dollar from N371 traded last Wednesday, traders said.

    The Nation leant that yesterday’s position followed release of huge dollar cash held by speculators into the market, which boosted liquidity in the system.

    President, Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe, who confirmed yesterday’s rate said millions of dollars also came in from tourists and other secondary sources.

    He said it was also possible that undisclosed amount of dollars came in from the Central Bank of Nigeria (CBN) to support the naira against the greenback.

    Many forex traders are trying to hedge against likely currency depreciation when the CBN clarifies its new forex policy.

    The demand for dollar had risen, with many buyers buying up every available greenback from retail outlets. “Dollar demand has increased due to uncertainty around CBN’s forex policy,” Gwadabe said.

    The CBN has said it would abandon its naira peg to the dollar and introduce a flexible currency regime. It has not said how this would work, and this has unsettled investors, who are worried about getting caught in the middle of devaluation.

    Most firms and individuals that normally sell dollars to retail currency dealers are holding on to cash, Gwadabe said.

    However, the CBN’s tight control of the naira was lifted at the last Monetary Policy Committee (MPC) meeting in Abuja, where flexible exchange rate regime was officially adopted to ease dollar crunch in the economy. Analysts predicted that the policy shift is expected to attract over $12 billion in the third quarter as more foreign investors return to take advantage of the new policy shift.

    Explaining the rationale for the decision, CBN Governor, Godwin Emefiele, said the drastic drop in forex earnings, which has made it difficult for the country to fully meet forex demands, prompted it to liberalise the market and create improved dollar liquidity. He promised that the flexible exchange rate regime modalities will be worked out by the CBN and banks later on.

    The expectation is that foreign portfolio investors and foreign direct investment worth over $12 billion, which have been staying on the side-line, would find their way into the system on the back of foreign investor confidence receiving a boost as the interbank market is reinstated as the official platform for market determined exchange rate.

    Managing Director, Afrinvest West Africa Plc, Ike Chioke, sees the decision as positive for the economy and financial market. He said the indication of a flexible exchange rate regime is anticipated to strengthen performance of the equities market.

    “Although the actual impact of the recent move to embrace flexibility in the currency market is difficult to analyse at the moment, given that the details of the operation of the planned flexibility is yet to be announced.”

    While we await the “modus operandi” of the new forex regime, we maintain that flexible exchange rate policy will go a long way in addressing the current spread between the official/interbank and the parallel market rate,” Chioke said in an emailed report.

    “We expect this move to help improve forex supply constraints as foreign investor sentiments improve towards Nigeria as an investment case,” he added.

  • 10 countries, 200 firms for Abuja Housing Show

    10 countries, 200 firms for Abuja Housing Show

    Ten countries, 20 organi-sations and 200 indigenous companies will attend the Abuja Housing Show between July 18 and 20.

    The event, themed: “Expanding Access to Affordable Housing in Africa”, will be declared open by the Vice President, Prof Yemi Osinbajo. The Minister of Power, Works and Housing, Babatunde Fashola would be the Chief Host, while the Minister of the Federal Capital Territory (FCT) Muhammad Bello, would be the Guest of Honour.

    Eminent speakers from Spain, South Africa, the United States (US), The Gambia and Nigeria have been carefully selected to deliver lectures on diverse topics. They include: the Managing Director of Hydraform from South Africa, Mr Robert Plattner; Managing Director of Global Green Built from Spain, Mr Alejandro Pons; the Managing Director, TAF Homes, The Gambia, Mr Mustapha NJIE; Managing Director of UPDC, Mr. Hakeem Ogunniran; the Chief Executive Officer, Aggregates and Concretes, Lafarge Africa, Mr. Loren Zanin; Prof. Mustapha Zubairu of Federal University of Technology, Minna, and the Managing Director, Nigeria Mortgage Refinance Company, Prof. Charles Inyangete.

    The Chief Executive Officer (CEO) of FESADEB Communications, Mr. Festus Adebayo, said the forum will provide opportunity for mortgage banks, developers, building material producers and professionals in the building industry to showcase their products and services, exchange ideas and share innovations in the industry.

    At the end of the event, he said, there will be lottery and award dinner to mark the 10th anniversary of the show. The lottery winner, which would be determined through a raffle draw, would smile home with a plot of land.

  • FIRS shuts more firms in Lagos, Aba, Owerri

    FIRS shuts more firms in Lagos, Aba, Owerri

    The enforcement unit of the Federal Inland Revenue Services (FIRS) yesterday continued its closure of big companies in Lagos and across the country for non-payment of a variety of taxes. In Lagos, FIRS officials shut down the premises of  RT Briscoe Nigeria PLC, Sinopec Nigeria, an oil and exploration company in Ikoyi, over failure to remit their taxes.

    The Lagos enforcement team, led by Emeka Obiagwu, sealed up Briscoe Motors  located on  Fatai Atere Way, Mushin, over the company’s failure to remit  N1.9 billion in taxes. The team ordered  the  staff out of their offices and locked up the building.

    A top management staff of the company made efforts to pacify FIRS officials, saying the company had  N150million to the FIRS.

    Obiagwu, however, maintained that until “the company remits a minimum of 50% of the total amount owed in taxes, its premises will remain shut.”

    “My mandate is to get at least 50% of the total amount owed by the company, anything less  than that will not be acceptable,” Obiagwu said.

    At Sinopec Nigeria, the company which  owes $15million, the enforcement team had no trouble shutting down the office premises  and staff quarters

    The first company visited by the enforcement team, Hammoud and Saidi International, is located at Wuse Zone 5 Area of Abuja.

    The company is owing N5.9 million tax liability for the 2012. Only one official of the company who simply identified himself as Tony was available at the time of the enforcement’s team’s arrival.

    He could not present any evidence of payment  to the enforcement team. Consequently, the office of the company was shut.  Also yesterday, the FIRS team in Aba, Abia State, shut down the premises of Dan Dollars Limited and D.E Okafor and Sons Limited for non-remittance of taxes.

    It will be recalled that the FIRS team, on Thursday, shut the Imo Transport Company and Hotels & Tours Ltd in Owerri, Imo State.

  • Stock Exchange to delist 17 firms for poor governance

    Stock Exchange to delist 17 firms for poor governance

    The National Council of the Nigerian Stock Exchange (NSE) has approved delisting of 17 companies from the market.

    A report obtained by The Nation indicated that 18 companies have been slated for delisting, including 17 companies that have been earmarked for compulsory delisting and a company that had opted for voluntary delisting over its inability to comply with listing requirements.

    Finding’s at the weekend indicated that the delisting will shave of more than N33 billion from the market capitalisation, implying direct loss of similar value to investors who may not be able to unlock such value in the absence of a regular stock exchange.

    Already, the Quotation Committee of the National Council, which presides over listing and delisting of companies, has approved final delisting of seven of the companies while it has also approved final delisting process for 10 other companies.

    The final delisting approval implies that the Exchange has concluded and complied with the regulatory requirements in the delisting process, including issuance of necessary notices, forbearances, fair hearing and probation without any rectification from the affected company.

    The final delisting process outlines the step-by-step delisting process and implies ongoing engagement of the affected company on the timeline for compliance with listing requirements in default.

    Under compulsory delisting, the authorities at the NSE will at a specified date, after completion of the delisting process and approvals, delist the shares of the affected company without any further recourse to the position of the board or shareholders of the affected company. Voluntary delisting is the deliberate withdrawal of the shares of a company from the Exchange by the board of directors, acting on the mandate of the statutory majority of the shareholders.

    Companies which final delisting has been approved by the council included Aluminium Manufacturing Company of Nigeria Plc, Adswitch Plc, Jos International Breweries Plc, G Cappa Plc, IPWA Plc, West Africa Glass Industries Plc and Investment and Allied Insurance Plc.

    Companies which final delisting process has been approved included Rokana Industries Plc, Navitus Energy Plc, formerly Union Ventures & Petroleum Plc; International Energy Insurance, Costain (West Africa) Plc, Lennards (Nigeria) Plc, Deap Capital Management & Trust Plc, Evans Medical Plc, P.S Mandrides & Company Plc, Nigerian Ropes Plc and Premier Breweries Plc.

    A source in the know said the companies were being delisting for recurring and possibly irredeemable inability to comply with the listing requirements of the Exchange, especially in the areas of timely and accurate rendition of operational and financial accounts and other corporate governance issues.

     

  • Lalong revives moribund firms

    Lalong revives moribund firms

    Some dilapidated firms in Plateau State are coming to life again, thanks to the determination of the Simon Lalong administration. A number of those comatose corporations were left for dead for as long as 10 years and more.

    The government said when those firms start functioning they will generate revenue for the state now that federal cash has dropped due to falling oil prices.

    The famous Jos Main Market destroyed in a 2002 fire is top of the government’s agenda. The market, the largest of its kind in West Africa, will earn huge dividends for the state. Another firm is the Highland Bottling Company.

    Both projects are expected to be revived on Public Private Partnership (PPP) agreement the revival of moribund companies is being handled by the Plateau Investment and Property Company Limited (PIPC).

    Chairman on the project implementation unit of PIPC, Mr. Ezekiel Gomos has handed over the Highland Bottling Company to Hummer Company Nigeria Limited.

    He said, “The Plateau State government has signed an agreement with Hummer Company Limited for the resuscitation of the moribund Highland Bottling Company located in Barkin Ladi Local Government of Plateau State.”

    The agreement was signed on behalf of the state government by Chairman Technical, Board of Plateau Investment and Property Development Company Limited (PIPC) Mr. Ezekiel Gomos and the Founder/Chief Executive Officer (CEO) of Hummer Company Limited Mr. Joseph Umoru.

    Mr. Gomos said, “This agreement with this private company, Hummer Company Limited is a move to affect the key policy trust of Governor Simon Lalong administration in the area of industrialising the state. Governor Lalong did promise to revitalise all the ailing industries of the state for the purpose of creating jobs and boosting the revenue profile of the state, this makes this achievement a very historic one in Plateau state.

    “The State owned Highland Bottling Company is one of the state ailing companies that we are handing over to a private investor today, the company was shot down since 1995 and it has been difficult to bring them back to life. But this government has made history by coming to this agreement with Hummer Drinks Limited to take over the company and turn it around for the benefit of the state.

    “By this agreement, this private company will hold 67% share of the company and government will hold 33% shares. This to us in PIPC, is a major achievement because government has been holding 100% of the abandoned company and doing nothing with them” said Gomos.

    Managing Director of Hummer Drinks Limited, Mr. Joseph Umoru, in his remarks said, “The company appreciate the state government for giving the opportunity to indigenous companies to partner with government. And I want to assure the government and people of the state that Hummer Drinks Limited has the technical capacity to run this Highland Bottling company successfully.

    He said, “We have the relevant experience to produce bottled water, beverage drinks, carbonated drinks, etc, from the company and we have resolved to inject at least N100 million to commence the first phase of turnaround of the ailing company.

    Secretary to Barkin Ladi Local Government council, Mr. Joshua Dakop, where the company is located expressed gratitude with Plateau state government for reviving the moribund company, saying youths of the locality stand to gain more from the project, he also promised the local government will ensure adequate security of staff and facilities of the company.

    Before the handover of Highland Bottling Company to the private investor, the state government has commenced the process of partnering with relevant private companies to rebuild the burnt down Jos Ultra-Modern Market located at Teminus Jos.

    Though PIPC, the state government began by looking for business advisors for the project, when the bid was declared open, twelve private investors bided, four of them were picked and out of the four, one of them was expected be the project advisor that will guide government on the reconstruction of the market.

    Already, youths of the state who have been seeking for employment have dusted their certificates to apply for jobs in the companies lined up for revival.

  • CPC advises Fashola on power firms

    CPC advises Fashola on power firms

    The Consumer Protection Council (CPC) has carried its crusade against consumer abuses to the Minister of Power, Works and Housing,  Babatunde Fashola,  charging him to hold operators in power and housing sectors accountable to their contracts with consumers.

    Its Director-General,  Dupe Atoki, spoke during a visit to the Minister of Works, Housing and Power, Mr Babatunde Fashola in Abuja, stating that despite measures put in place by the electricity industry regulators to ensure effective service delivery, the Council still receives consumer complaints against operators in the sector.

    Atoki said: “Some of these complaints include non-metering of consumers, which results in estimated and arbitrary billing of a huge consumer population; non-supply of infrastructure requirements, such as transformers, electric poles and cables to some business units, thereby forcing consumers to pay for same without reimbursement; and irregular disconnection.