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Unity Bank Sacks 215 Workers

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Unity bank - Investors King

Unity Bank Plc yesterday reduced its over 2,000 workforce by sacking 215 members of staff, it was reliably learnt.

The exercise, it was further leant, was to enable the lender realign its operation and pursue a long term growth strategy.

Some of the downsized staff members were said to have opted to resign while management approved severance package for them in line with the bank’s policy.

The lender last May, forged a strategic alliance with Black Trituium, equity and investment fund manager.

The bank said it in a report on its website that it was driven by the vision to be the retail bank of choice for all Nigerians and “this is at the core of all that we do”.

Investigation revealed that the affected members of staff were those that achieved less than 40 per cent of their performance target, which affected the lender’s overall profitability in recent years.

The downsizing, which cut across all cadres including junior, middle and top management positions, happened at a time majority of banks are battling with poor profitability over harsh economic conditions and heightened business risks from the plunge in crude oil prices.

The bank is also said to have attracted specialist skills to its workforce since the relocation of its head office from Abuja to Lagos, which was in line with its plan to grow market share in viable clusters of the retail market.

A source close to the bank said the new focus of the business has led to significant enhancement of human capital in its various business units.

This was with a view to injecting fresh ideas, initiatives and energies to strengthen its various departments with capabilities to pursue the attainment of strategic business focus in the Agricultural financing, retail/Small and Medium Enterprises (SMEs) and development of rural economy.

It bank, it was further leant, recently hired about 200 new staff to drive the transformation initiative while about 100 other staff were said to have been promoted.

Commenting on this development, an industry expert asserted that these exercises are part of the hard choices that forward-looking organisations desiring optimum performance had to take from time to time to enable it deliver consistently on shareholders expectations.

In the report on its website, the lender said it was one of Nigeria’s leading retail banks with 240 business offices spread across the 36 states and the Federal Capital Territory. “We are Nigeria’s seventh largest bank by business locations,” it said.

The Nation learnt that the new investor in the bank, Black Trituium, was committed to making significant equity investment in the bank.

This strategic alliance will expand Unity Bank’s business scope, strengthen its capital base and support the bank’s retail strategy while meeting the investment objectives of Black Trituium. The Black Trituium manages funds for individuals and institutions such as Trade Union Congress (TUC).

The collaboration with the bank is expected to expand the retail and Small and Medium Enterprises segment of the bank. Investment analysts see this as a unique opportunity with the potential of broadening the bank’s customer base and provide long term stakeholders value.

Furthermore, given the current economic outlook, this strategic alliance will come with immediate benefits that will enhance the capacity of the bank to meet the needs of its banking public.The alliance will also support government’s initiatives aimed at driving growth in the real sector through Small and Medium Enterprises (SMEs) and retail products, with particular focus on the agricultural sector.

Unity Bank commenced operations in January 2006 following the merger of nine financial institutions with competences in investment, corporate and retail banking.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Dangote Lauds African Banks, Repays $2.4B of Refinery Loans Despite Challenges

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Aliko Dangote - Investors King

Aliko Dangote, Africa’s richest person and founder of the Dangote Group, announced that he has repaid $2.4 billion of the $5.5 billion borrowed to construct his $19 billion refinery near Lagos.

This disclosure was made at the Afreximbank Annual Meetings (AAN) and AfriCaribbean Trade & Investment Forum, where Dangote praised the crucial support from African financial institutions amidst numerous challenges and sabotage attempts.

Speaking to an audience of international financiers and business leaders, Dangote revealed that various entities, both local and foreign, sought to derail the 650,000 barrels per day facility.

“Many thought the project would fail,” he said, highlighting the skepticism surrounding the ambitious venture. Despite these hurdles, Dangote credited the Afreximbank and Nigeria’s Access Bank for their unwavering support, emphasizing that the project would not have succeeded without them.

He elaborated on the challenges faced, noting that foreign banks were often unsupportive, with some even attempting to push the project into default during the COVID-19 pandemic.

“If I had raised the idea of international project financing, they would have shut it down, asking for my great-grandmother’s birth certificate,” Dangote remarked, criticizing the stringent and often discouraging conditions set by international financial institutions.

Dangote underscored the importance of African financial institutions in the continent’s industrialization, stating, “Without banks like African Finance Corporation (AFC) and Afreximbank, it would be difficult to industrialize Africa. They understand the challenges and issues unique to our continent.”

Despite the adversity, Dangote proudly announced significant progress in loan repayment. “We borrowed just over $5.5 billion.

We’ve paid interest and some principal, totaling about $2.4 billion. Now, only $2.7 billion remains. We’ve done very well for a project of this magnitude,” he stated.

Addressing concerns about receiving enough crude oil for the refinery, Dangote acknowledged ongoing resistance from established players in the oil industry.

“Those who had access to easy money for decades don’t want to lose their grip. They fight back, but these challenges are temporary. We will overcome them,” he assured.

Dangote also highlighted the strategic importance of the refinery for Nigeria and the broader sub-Saharan region.

“Africa must produce what it consumes. We can no longer rely on the West. During the COVID period, some international banks hoped to see us default. Thanks to banks like Afreximbank, that didn’t happen.”

Furthermore, he revealed that 25% of Dangote’s fertilizer production is now exported to the US, and the company is poised to meet the Caribbean’s urea needs.

He emphasized the refinery’s role in securing Nigeria’s energy future, noting that the facility will act as the country’s strategic reserve for petroleum products.

With eyes set on future ventures, Dangote announced plans to enter the steel industry. “We aim to ensure every piece of steel we use comes from Nigeria. No foreigner will make our continent great; it must be driven by domestic investment,” he proclaimed.

In a testament to the Dangote Group’s self-sufficiency, he revealed that the company produces about 1,500 megawatts of power for its operations, bypassing the national grid and its limitations.

In closing, Dangote reflected on his journey, acknowledging the continuous battle against powerful adversaries but expressing confidence in ultimate victory.

“The fight is ongoing, but with the support of our people and government, we will prevail,” he affirmed.

As Africa’s industrial landscape continues to evolve, Dangote’s story serves as a beacon of resilience and a call to action for local investment and self-reliance.

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Merger and Acquisition

Tolaram Acquires 58.02% Stake in Guinness Nigeria from Diageo

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Guiness

Tolaram Group has acquired a 58.02% stake in Guinness Nigeria from Diageo Plc. for ₦81.60 per share, representing approximately a 60% premium over Guinness Nigeria’s closing price of ₦50 on Monday.

Announced on June 11, 2024, the acquisition underscores Tolaram’s commitment to expanding its footprint in Nigeria’s robust consumer market.

Diageo, the UK-based beverage giant, will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria, now under Tolaram’s majority control, through long-term agreements.

Under the terms of the deal, Tolaram will initiate a mandatory takeover offer in compliance with Nigerian Exchange regulations.

However, Guinness Nigeria will continue to be publicly listed, maintaining its presence on the Nigerian Stock Exchange.

A statement from Guinness Nigeria highlighted the terms of the agreement, confirming the continued production of the Guinness brand along with Diageo’s locally manufactured ready-to-drink and mainstream spirits under license and royalty agreements.

The transaction is slated for completion in 2025, pending necessary regulatory approvals.

Commenting on the acquisition, Sajen Aswani, Tolaram’s Chief Executive, said: “Our partnership with Diageo to jointly grow Guinness Nigeria underscores our commitment to build on our strong presence and heritage in Nigeria, cultivated over decades of dedication and unwavering confidence in the future of Africa. We take a long-term view on all our investments, and this partnership reflects our optimism on the exciting opportunities that lie ahead across the continent.”

Diageo CEO Debra Crew echoed Aswani’s sentiment “I’m excited to announce our new partnership with Tolaram. Guinness has been Nigeria’s favourite beer for nearly 75 years. Tolaram shares this passion for Guinness and for Nigeria, making them the perfect partners as we continue to grow our business and seek to delight even more consumers in the country.”

This strategic acquisition is expected to bolster Guinness Nigeria’s market position, leveraging Tolaram’s extensive experience in the consumer goods sector to drive growth and innovation.

The partnership aims to enhance the availability and appeal of Guinness and other Diageo products in Nigeria, contributing to the country’s economic development and consumer satisfaction.

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Company News

Dangote Refinery Shifts Petrol Production Start to July

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Dangote Refinery

Africa’s largest oil refinery, the Dangote Refinery, has postponed the start of its premium motor spirit (PMS) production, commonly known as petrol, from June to mid-July.

This adjustment was confirmed by Aliko Dangote, President and CEO of the refinery, during a press briefing at the $20 billion facility in Lagos on Monday.

Dangote attributed the change in the production date to minor delays encountered in the final stages of the project.

“We had a bit of delay, but PMS will start coming out by 10 to 15 of July. But then we want to keep it in tank to make sure that it settles. So by the third week of July, we’ll be able to take it into the market,” he stated.

The delay necessitated moving the originally proposed production commencement from June to mid-July.

The refinery will begin production of petrol between July 10 and 15, with supply to local marketers expected to commence from the third week of July.

Backstory and Expectations

Initially, various reports had predicted the refinery’s petrol production would start in June. Standard and Poor’s Global (S&P Global) Commodities Insights analysts had forecasted a later timeline, suggesting production would ramp up in the fourth quarter of this year.

Despite the predictions, Dangote’s team has been aiming for a mid-year start.

Exportation and Domestic Supply

In addition to the upcoming petrol production, the Dangote Refinery has already begun supplying jet fuel and diesel to domestic marketers. Furthermore, the facility recently exported its first jet fuel cargo to Europe.

The inaugural shipment, loaded onto the vessel “Doric Breeze,” departed from the Lekki Free Zone in Lagos on May 27 and is en route to Rotterdam, Netherlands, according to data from S&P Global Commodities at Sea.

Implications for Nigeria

The Dangote Refinery is poised to significantly reduce Nigeria’s reliance on imported petroleum products. Despite being Africa’s most populous country and largest oil producer, Nigeria imports almost all of its fuel due to insufficient refining infrastructure.

The new refinery aims to bridge this gap and enhance the country’s energy security.

Future Prospects

On future prospects, Aliko Dangote said “What we are doing is to be able to export petroleum products to anywhere and compete with any company. By next week, we’ll be producing about ten thousand ppm in terms of diesel, which now what’s happening is that we import about 2 to 3 thousand. We will produce the best.”

As Nigeria anticipates the mid-July start for petrol production, the Dangote Refinery is set to play a pivotal role in transforming the nation’s oil and gas sector, bolstering domestic supply, and enhancing its position in the global energy market.

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