- Bhart Airtel Pays $127m to Acquire Econet’s Stake in Nigerian Unit
After paying $127 million, Bharti Airtel International (Netherlands), a wholly owned subsidiary of Bharti Airtel, has completed the acquisition of Econet Wireless Limited’s entire 4.2 per cent shareholding in Airtel Nigeria, according to a statement on its website.
Recalled that Chairman of Econet Wireless, Strive Masiyiwa, had dragged the Nigerian shareholders of Airtel to court, for over 10 years, following what he described as his forceful removal as the technical partner to the Nigerian network.
Indeed, under the terms of the 2010 Share Sale/Purchase Agreement, Zain had provided Airtel certain indemnities covering the Nigeria Litigation and for certain tax claims.
As a result of the transaction, which was carried out through a wholly owned subsidiary of Bharti Airtel International (Netherlands), the firm’s overall holding in Airtel Nigeria has increased to 83.25 per cent.
The minority stake held by Econet Wireless had been in dispute since Bharti Airtel acquired Zain Group’s African business in a $10.7 billion transaction in 2010.
At the start of this month, Airtel reached an agreement with Zain Group, under which the Kuwaiti firm agreed to pay around $129 million ‘for the settlement of all of Airtel’s claims on account of the Nigeria litigation, certain tax matters and associated legal costs’.
At the same time, Bharti Airtel announced that a separate settlement had been reached with Econet, which resolved all claims and disputes between the pair, including in Nigeria and the Netherlands. ‘With these settlements, Airtel has closed several ongoing major litigations in Nigeria, the United Kingdom and the Netherlands,’ the firm said.
Already, from a $170 million loss a year ago in its Africa’s operations, India’s telecommunications firm, Bharti Airtel, sharply narrowed its net loss in the continent’s operations to $91 million.
The firm, owned by India’s business mogul, Sunnil Bharti Mittal, hinged the slash on growth in data customers and consumption and currency stabilisation in most markets, except for Nigeria, where the Naira depreciated by 7.9 per cent. Revenue for the continent rose 3.7 per cent to $898 million.
Chief Operating Officer of Africa, Raghunath Mandava, said that underlying Africa revenue growth for the quarter was 4.7 per cent year- on-year, backed by focus on profitable top line growth, led by localised distribution, stronger data networks and the company’s war on waste programme.
In Nigeria, the firm, which is headed by Segun Ogunsanya, currently controls 22 per cent of the market and services over 32 million customers across the country.
The telecommunications firm claimed that its second-quarter net profit fell almost five per cent from a year earlier as its voice and data businesses came under pressure with the entry of Reliance Jio Infocomm in India and its interest burden rose. India’s top telecom company beat market estimates, though, as it controlled costs.
According to ET India, the company posted a net profit of Rs 1,461 crore for the three months ended September, topping the average estimate of about Rs 1,200 crore in an ET poll of analysts. Profit was little changed from Rs 1,462 crore in the April-June quarter.
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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