In this edition, we highlight significant announcements from various companies, shedding light on their strategic moves, market performances, and regulatory approvals. From FMN’s commercial paper issuance to Coronation Group’s license acquisition, and GTBank’s salary increase, these stories highlight the defining moments from Corporate Nigeria last week. Enjoy.
Flour Mill’s Commercial Paper
Flour Mills of Nigeria PLC (FMN) announced the issuance of up to N55 billion Series 3 Commercial Papers (CP) as part of its NGN200 billion Commercial Paper Programme. This strategic move aims to secure short-term funds for working capital and general corporate purposes, reinforcing FMN’s financial stability and supporting its ongoing operations.
FMN boasts of a strong financial position, a diverse product portfolio, an extensive distribution network, and a prominent market share. These favourable attributes have garnered positive ratings from renowned agencies like Agusto & Co and DataPro. However, it is essential to highlight that FMN’s debt has experienced a significant increase, reaching approximately N303 billion, which raises concerns about the company’s long-term ability to manage and repay these loans effectively.
Coronation Group’s new Licence
Coronation Group Limited announced that it has obtained a Capital Market Holding Company (CMHC) license from the Securities and Exchange Commission (SEC). The company aims to build digital platforms. And part of the plan is to deploy $500 million of its capital in the business by 2033.
With a focus on innovation, excellence, and strong corporate governance practices, Coronation Group aims to address unique challenges in Africa and drive growth in the continent’s economy.
Sovereign Trust Insurance’s Impending Right Issue
Sovereign Trust Insurance Plc also received approval from the Securities and Exchange Commission (SEC) for its proposed right issue of 2.841 billion ordinary shares. The company plans to offer the shares at a price of 50 kobo per share, with a ratio of one ordinary share for every four held. The qualification date for the Rights Issue is set for July 22, 2022.
Once the offer documents are approved, the application list is expected to open on July 6, 2023, for a period of 28 days. Shareholders can access the rights circulars and application forms through the company’s registrars’ website.
GTBank Increased Contract Staff’s Salaries
GTBank increased the salaries of its junior and contract staff in response to the rising cost of living in Nigeria. The move comes as employees face the impact of fuel subsidy removal, leading to higher transportation expenses for their daily commutes. The salary increase is expected to alleviate some financial burden for the affected staff members.
The move by GTBank reflects a growing trend among Nigerian banks, with reports suggesting that other financial institutions may also be considering similar adjustments.
Resolution Regarding Buyout of Union Bank’s Shareholders
Shareholders of Union Bank Plc will receive N7.00 per share as consideration for the transfer of their shares following the acquisition by Titan Trust Bank Limited. The resolutions approving the Scheme of Arrangement were passed at a Court Ordered Meeting held by Union Bank.
The meeting authorized the transfer of Scheme Shares to Titan Trust Bank and the de-listing of Union Bank shares from the Nigerian Exchange Ltd. (NGX) once the Scheme becomes effective. The transaction aims to acquire the shares held by minority shareholders, with each holder receiving N7.00 per transferred share.
Zenith Bank Joined the Exclusive Trillion Naira Club
Zenith Bank has joined the group of stocks with a market capitalization of over one trillion naira (SWOOTs) as its market cap crossed the N1 trillion mark during the week. With a 3.23% increase in its share price, Zenith Bank’s market capitalization reached N1.004 trillion. It is now part of the exclusive group that includes Airtel Africa, MTN Nigeria, Dangote Cement, BUA Foods, and BUA Cement.
The combined market capitalization of the SWOOTs now stands at N21.560 trillion, contributing to 66.7% of the entire NGX Equity market capitalization. The performance of these stocks greatly influences the direction and overall performance of the stock market.
GSK Nigeria’s Unclaimed Dividends
The unclaimed dividend of GlaxoSmithKline Consumer Nigeria (GSK) Plc has reached N1.28 billion as of December 31, 2022, according to the company’s audited annual report. This represents a 0.8% increase from the previous year’s unclaimed dividend of N1.27 billion. GSK continues to work with its registrars to ensure that shareholders receive their dividends and advises shareholders to complete e-dividend registration or contact the registrars to update their information.
The growing wave of unclaimed dividends in the Nigerian capital market is attributed to various factors such as shareholders who have passed away without providing next of kin information, multiple applications during the investment process, and companies lacking liquidity to make dividend payments. The issue of unclaimed dividends has persisted despite efforts to encourage investors to register for e-dividend to reduce such occurrences.
Uber Nigeria Increased Fares
Uber Nigeria has announced a fare increase in a bid to support its drivers who are facing challenges due to inflation and recent fuel price hikes. The adjustment aims to help drivers cover rising operating costs while maintaining an affordable service for riders. Uber stated that the fare increase is part of its ongoing efforts to support its driver community and provide better earning opportunities.
The company acknowledged the impact of fuel cost increases on drivers and reflects its commitment to engaging with drivers and understanding the realities they face in their businesses. The fare adjustment is not meant to cover the entire cost of fuel but is intended to assist drivers in coping with the recent fuel price hike. Uber remains one of the leading ride-hailing platforms in Nigeria, competing with other players such as Bolt, InDrive, and Gokada.
Airtel Africa Welcomes FX Unification
Airtel Africa Plc expressed optimism about the recent changes in Nigeria’s foreign exchange market, stating that they will help alleviate the challenges faced in accessing US dollars. The telecommunications and mobile money services provider welcomed the abolishment of segmentation in the foreign currency market, with all segments now collapsing into the Investors and Exporters (I&E) window.
The company, however, disclosed a currency devaluation sensitivity analysis, indicating that a 1% devaluation in the Nigerian naira would negatively impact revenues, EBITDA, and finance costs. But Airtel Africa added that it does not anticipate a significant impact on its EBITDA margin, as the USD component of operating costs in its Nigerian business is minimal.
NGX’s new Directors
The Nigerian Exchange Group (NGX) Plc announced the appointment of six new directors to its board, pending shareholder approval at the upcoming Annual General Meeting. Among the new directors are representatives from influential shareholders VFD Group and Cardinal Stone Partners, who own 4.49% and 5.1% holdings in NGX respectively.
In addition to the director appointments, shareholders will have the opportunity to consider a special resolution to amend Article 24 of the Company’s Articles of Association. The proposed amendment grants the board the authority to increase the issued share capital and allot new shares, subject to prior approval from shareholders at a General Meeting. NGX has been seeking to raise capital, but some shareholders have raised concerns about procedural irregularities.
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