RECAP: A sensational week in Corporate Nigeria as Otedola opens up on Transcorp deal

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  • Hello and welcome to Nairametrics’ Corporate News Roundup for the week that ended May 13, 2023. 
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Just when we thought the Transcorp takeover saga was over and done with, it took an interesting new dimension. Femi Otedola, who had launched the takeover bid but failed, issued a statement. And he had quite a lot to get off his chest, including some mind-boggling accusations against Tony Elumelu, the company’s Chairman. As expected, Otedola’s revelations inevitably dominated the headlines and made for a dramatic week in Corporate Nigeria.

 Let’s begin today’s Nairametrics Corporate Roundup by looking back at the key takeaways from Otedola’s statement. 

Transcorp deal saga continued last week

Last week, Femi Otedola issued a statement explaining his decision to acquire and later sell his 5.52% stake in Transcorp Plc. In the statement, he recalled investing $20 million in 2005 to enable Tony Elumelu to acquire UBA. At this time, he was the Chairman of Transcorp. However, by 2008, Otedola had become bankrupt, and Elumelu allegedly used his (Otedola’s) shares in UBA to finance his loans and even took over his shares in Transcorp. He also disclosed other alleged corporate manoeuvrings by Otedola.

Despite these allegations, Otedola stated that he had good intentions for the company and its shareholders when he bought shares in Transcorp Plc years later, seeing an opportunity to unlock its potential and create value for everyone involved. Transcorp has yet to respond to Otedola’s statement.

Elumelu continues to tighten grip on Transcorp

Meanwhile, in a somewhat related development, Tony Elumelu’s wife, Dr Awele V. Elumelu, acquired 5.076% of Transcorp’s shares last week. The transaction was valued at N6.4 billion and would help strengthen Tony Elumelu’s control of the company. 

Note that owning a 5% stake in a publicly quoted company is important in Nigeria because it promotes transparency, safeguards against insider trading and market manipulation, grants influence and control, and provides lucrative exit opportunities.

Share sales at Otedola’s Geregu Power

Over at Geregu Power Plc which is majority-owned by Femi Otedola, some 2,823,092 units of shares were sold, representing about 0.1% of the company’s total outstanding shares. Nairametrics reported that the shares sold were valued at N820.6 million.

The company’s share price closed last week’s trading session at about N290.7 per share on Friday, May 12th, down from its year high of N323 per share. 

Airtel Nigeria’s revenue growth

In other news, Airtel Nigeria reported N980 billion ($2.128 billion) in revenue for the financial year ended March 31, 2023. This represents a 20.3% growth year-on-year compared with the N864.9 billion ($1.878 billion) the telco earned during the previous year. 

During the period under review, Airtel Nigeria’s voice revenue grew by 13.4%, while data revenue rose by 27.8%, driven by a 17.3% growth in the data customer base and a 9.9% increase in data ARPU. However, the company noted that cash scarcity in Nigeria in Q1 2023 negatively impacted its revenue. This is because 50% of total recharges by customers are cash-based.

MTN Nigeria leases NTEL’s spectrums

MTN Nigeria leased two spectrums (5HMz Frequency Division Duplex and 10HMz FDD) from NTEL in a deal approved by the Nigerian Communications Commission (NCC). Nairametrics reported that the transaction cost MTN Nigeria N4.25 billion and is for 2 years starting from May 1st, 2023. 

CEO, Karl Toriola, described the spectrum lease transaction as a significant milestone in delivering MTN’s Ambition 2025 Strategy, which aims to accelerate long-term business growth in Nigeria.

Ignite Investment pays Otedola

Ignite Investment, which is owned by Ardova Plc’s Chairman Wasiu Sowami, has completed the full payment of $19 million, being the consideration fee for the acquisition of Ardova from billionaire Femi Otedola. The full payment followed an arbitration ruling in favour of Otedola, requiring Sowami to complete the payment.

Recall that Ardova Plc, formally Forte Oil Plc, was sold to Ignite Investment in 2019 after years of being managed successfully by Femi Otedola.

Nigerian Breweries’ commercial papers on FMDQ

Nigerian Breweries Plc’s N16.49 billion Series 1, N5.03 billion Series 2, and N45.74 billion Series 3 commercial papers were quoted on the FMDQ Securities Exchange Limited last week. Funds realised from the CP issuance would enable Nigerian Breweries to meet its revenue shortfalls. 

Note that the company is the largest brewer in Nigeria and specialises in the production and sale of lager, stout, non-alcoholic malt, and soft drinks. It operates over ten breweries and approximately two malting plants across the country.

Access Bank expands to Paris

Access Bank Plc launched a subsidiary in Paris, France, which will focus on trade finance between Africa and France. The bank aims to support trade possibilities and trade finance solutions for businesses, ranging from large conglomerates to SMEs, while digital capabilities will make banking more efficient for customers.

The expansion into France comes on the heels of Brexit and is part of Access Bank’s strategic expansion efforts to establish a presence across Europe. CEO, Herbert Wigwe, said the new subsidiary’s range of banking products and services will be a valuable asset for businesses looking to trade internationally.

Nigerian banks’ software expenditures in 2022

A special analysis by Nairametrics showed that Access Bank led the way in software spending among its peers, reporting a 128% jump in costs in 2022 compared to the previous year. Zenith Bank also continued its investment in software, while other tier-one banks, including UBA and GTCO, saw varying changes in their software spending.

The analysis also showed that a significant portion of software expenditure by Nigerian banks still goes to foreign providers, highlighting the need for greater investment in local IT companies to reduce reliance on foreign vendors and foster the growth of the local tech ecosystem.

Dividend payout for GTCO’s shareholders

The shareholders of Guaranty Trust Holding Company (GTCO) Plc approved a total dividend payout of N91.236 billion, representing N3.10 per share for the 2022 financial year. The Group proposed a final dividend of N2.80 per unit of ordinary shares held by shareholders, bringing the total dividend for the 2022 financial year to N3.10 per unit of ordinary shares.

The Chairman of GTCO, Mr Hezekiah Oyinlola, expressed his confidence in the Group’s diversified business model, agile systems, and customer-centricity as key drivers of its success in the years ahead.

 

 

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