Deals and Divestments: Everything that happened in Corporate Nigeria last week

Hello everyone and welcome to yet another roundup of the major events that unfolded in corporate Nigeria last week. I know it's been a while. Be rest assured of my consistency going forward.

Let's begin with the major stories...

---------------------------------------------------------------------------------------------------------------1/The past week was characterised by major deals and strategic moves by companies across Nigeria and beyond.  To begin, the South African owners of Shoprite International Limited announced their intention to divest from their Nigerian operation – Retail Supermarkets Nigeria Limited. 

According to a statement made available by the company, the decision to leave Nigeria was taken “following approaches from various potential investors” looking to invest in the Nigerian entity.   

Shoprite International also made it clear that the decision is in line with its “re-evaluation of the Group’s operating model in Nigeria” one of the 15 countries where it currently operates. 

The firm came to Nigeria about fifteen years ago and currently operates some 26 outlets across the country. There are about 2000 employees working there, majority of them being Nigerians.  A divestment means it will sell its holdings to another investor who will continue to run the business. 

2/In a similar move, MTN Group Ltd (the parent company of MTN Nigeria) announced that it would also be divesting from its Middle Eastern operations. MTN informed stakeholders that this is part of its strategic plan to shift focus entirely to its home continent, Africa. 

The telco will start the divestment process with the sales of its 75% stake in MTN Syria. The company particularly cited drastic revenue reduction from war-torn Syria and the complex nature of the country’s operating environment as part of the reasons it has decided to divest. 

MTN Group’s Chief Executive Officer, Rob Shuter, told reporters during a conference call that “the Middle East environment is becoming increasingly complex and it contributes less to the group’s earnings.’’ 

Shuter also disclosed that divestment from the Middle East region will be done in a phased manner, with its 3 consolidated subsidiaries in Yemen, Afghanistan, and Syria earmarked to be sold first. Note that these markets only contribute about 4% to the group’s earnings before interest, depreciation, taxation, and amortization. 

3/MTN Group also hinted during the week that plans are underway to sell part or all of its $243 million worth of stakes in Jumia Technologies AG. This is part of the telco’s effort to raise funds to pay down debt and enter new frontiers. 

As Nairametrics reported, MTN would be taking advantage of the fact that Jumia’s shares have gained about 142% so far in 2020, after recovering from its record lows in 2019. 

In the meantime, no concrete decision regarding this move has been made. But Nairametrics understands that MTN has been trying to dispose of its non-core assets as part of the business strategy to minimize debt and open new markets. 

So far, the group has generated about $812 million in asset sales that included disposing of its towers holdings in Ghana and Uganda to American Towers Inc. MTN Group also has about a 29% stake in IHS Towers, which could be put for sale any moment from now. 

4/Still on divestments, AXA Mansard Insurance Plc has sold off its stakes in its former subsidiary — Axa Mansard Pension Limited — to Eustacia Limited, a member of Verod Group. 

A statement made available to the Nigerian Stock Exchange noted that this is part of the insurance firm’s plan to focus mainly on and grow its insurance businesses across all parts of the country. 

At the end of a successful bidding process, Eustacia Limited was selected as the most preferred bidder, even as AXA Mansard (in agreement with the minority shareholders) agreed to sell the entire issued ordinary share capital of AXA Mansard Pensions to the new buyer.  

The issued ordinary share capital comprised of 60% shareholding (2,067,672,000 units of shares) held by AXA Mansard Insurance Plc, and 40% shareholding (1,378,448,000 units of shares) held by the minority shareholders. 

5/Let’s move on to the other major deals that happened during the week. Access Bank Plc announced last Thursday that its Zambian subsidiary (Access Bank Zambia) has reached a ‘definitive agreement’ with Cavmont Capital Holdings Zambia Plc (CCHZ) to acquire Cavmont Bank Ltd. 

This is the latest development concerning the impending acquisition which was first mentioned to stakeholders in early July this year. 

According to Access Bank, the deal is a highly complementary transaction that is expected to combine Access Bank Zambia’s wholesale and trade finance capabilities with Cavmont Bank’s retail and commercial banking operations. 

The impending transaction which, in the meantime is still subject to relevant shareholder and regulatory approvals, is also expected to better position Access Bank Zambia as one of the top 10 banks in the Southern African country. 

6/ Fast-growing transport/delivery startup, Plentywaka, raised $300,000 pre-seed investment to facilitate its expansion plans. 

According to a statement by the company which was sent to Nairametrics, the funding was led by EMFATO, Microtraction, and Niche Capital. It will help to facilitate that company’s planned expansion into the Federal Capital Territory Abuja and other Nigerian states. 

 Plentywaka will also use part of the funds to improve its mapping technology, especially now that it is kicking off operations in other states and the FCT. By extension, the money will also help to transform the transportation system in Nigeria, the company said. 

While commenting on the investment and proposed launch, Plentywaka’s Co-Founder and Managing Director, Johnny Enagwolor, said that “Securing investment and expanding into Abuja within our first year, in the midst of a pandemic speaks volumes of the demand for the service we provide. We are excited to have investment partners on board that see and believe in our vision. 

7/On Thursday last week, FBN Holdings Plc disclosed that it recently injected N25 billion worth of equity capital into First Bank of Nigeria Limited. The move is coming on the heels of FBN Holdings’ recent divestment from FBN Insurance Ltd. 

A statement signed by FBN Holdings’ Company Secretary, Seye Kosoko, noted that the N25 billion is part of the net proceeds from its recent divestment from FBN Insurance Limited. 

Meanwhile, FBN Holdings’ Chief Financial Officer, Oyewale Ariyibi, said that the “divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core banking business for which the Group is renowned.” 

8/Last week, Air Peace disclosed that it had sacked about 70 pilots under its employment reduced staff salaries by 40%. The sad decision was taken due to the devastating impact the Coronavirus pandemic has had on its business, the company said. 

Air peace’s spokesperson, Stanley Olisa, said in a statement that the decision was a “painful” one. He, however, explained that it “was taken for the greater good of the company and its almost 3000 workforce, the affected pilots inclusive.” 

9/ The management of Bristow Helicopters Limited also announced the company’s decision to lay off about 100 pilots and engineers over the next couple of weeks. Bristow’s announcement came barely 24 hours after Air Peace, sacked over 70 pilots. 

Bristow Helicopters, which provides auxiliary services to the oil and gas industry, also blamed COVID-19 for the decision to lay off the pilots.  

While describing the downsizing exercise as painful but inevitable, the company also made it clear that it would use this period to restructure all aspects of its business model. 

Elsewhere, UK’s Virgin Atlantic has already filed for bankruptcy as the global aviation industry continues to grapple with the devastating effects of the Coronavirus pandemic. 

10/ In appointment news, ExxonMobil announced the appointment of Richard Laing as the new Chairman and Managing Director of its 3 affiliate firms in Nigeria. The appointment took effect on August 1st, 2020. 

According to the statement by ExxonMobil, Richard Laing was appointed to replace Paul McGrath, who has been appointed Vice President, Global Projects for ExxonMobil in Houston after spending more than 3 years in Nigeria. 

Laing holds a bachelor’s degree in Mining and Petroleum Engineering from the University of Strathclyde, Glasgow and Master’s in Petroleum Engineering from Heriot-Watt University, Edinburgh. 

11/ Also, MRS Oil Nigeria Plc said its Board of Directors approved the appointment of Mr Marco Storari as a new Acting Director and Managing Director of the Company. 

Storari’s appointment followed the resignation of the company’s former Managing Director, Mrs Priscilla Thorpe-Monclus with effect from August 5, 2020. 

The resignation of Mr Christopher Okorie, who was one of the company’s directors, was also announced. Okorie’s resignation took effect on August 5, 2020. 

12/Lastly on this week’s corporate news roundup, the Co-founder and Chief Executive Officer of Seplat Petroleum Development Company Plc, Austin Avuru has retired as CEO of the company but will remain on the board as a Non-Executive Director. 

According to a notice sent to the Nigerian Stock Exchange and signed by the company secretary Mrs Edith Onwuchekwa, the resignation took effect on July 31, 2020. 

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