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AMCON Scales Down Arik’s Operations

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Arik air
  • AMCON Scales Down Arik’s Operations

Following its take over of Arik Air over two weeks ago, the Asset Management Corporation of Nigeria (AMCON) has scaled down the flight operations of Nigeria’s premier carrier to less than 30 per cent of the its capacity.

However, AMCON, in a statement yesterday, said public confidence in the airline was gradually returning and commercial banks more willing to engage with Arik Air.

But AMCON’s statement contradicts reality. When a reporter visited the General Aviation Terminal (GAT) of the Murtala Muhammed International Airport (MMIA), Lagos yesterday at 11.30 a.m., all the check-in counters of the once rowdy terminal were empty and totally bereft of passengers.

Instead, Arik ground staff were seen at their desks, waiting to attend to anyone willing to travel with the airline.

The airline, which at peak periods operated 120 flights a day, now operates about 15 flights daily with very low load factors, as passengers continue to shun the airline since the intervention by AMCON.

Also, it was learnt that of 28 operating aircraft in the airline’s fleet, only eight are now in operation comprising the two Bombardier CRJ 900s, one Bombardier Q400, and five Boeing 737s.

The Q400 is in a dedicated service with Chevron, effectively leaving the airline with seven operating aircraft for commercial flights.

This has forced Arik to cut back its domestic and regional operations, just as the airline suspended its international service immediately AMCON changed its management.

It was also gathered that international financiers and other creditors of the airline have concluded plans to sue the federal government after 30 days of AMCON’s intervention in the airline.

A source with the airline said that the creditors are consulting their lawyers to collectively file a class action suit against the government for the airline’s failure to honour its international obligations.

Inside sources further maintained that Arik’s workers who were owed two months salaries – December and January – before AMCON took over the management of the company on February 8, were only paid their January salaries.

AMCON, however, has maintained that the airline had a backlog of unpaid salaries of seven months when it took over two weeks ago.

According to some of the workers, who spoke on condition of anonymity, AMCON informed them that the December salaries should have been paid by the former management before it took over the company, which the corporation is currently auditing.

Also, cabin crew personnel whose November flight allowances were supposed to have been paid with the December basic salary, said they had lost hope that the money would ever be paid, now that AMCON is insisting that the former management should pay the December salaries.

“We were actually owed two months salaries before AMCON took over. I know that the Nigerian Civil Aviation Authority (NCAA) insisted that Arik must pay all of us our outstanding salaries in December, which the airline did after the labour strike. So it was the December and January salaries that were owed us,” an official of the airline said.

Many of the workers said even before AMCON took over, passenger traffic was already dropping because of cancelled and delayed flights. The situation only got worse with AMCON’s intervention, they added.

“AMCON has not been able to restore passenger confidence and because we have scaled down our flights, passengers now choose other airlines.

“Yesterday (Saturday), we operated to Benin from Lagos with only 18 passengers going and on the return leg. It is only the Port Harcourt service that still has a reasonable number of passengers,” one Arik official volunteered.

Also, since the take over of the airline and the cancellation of most of its regional flights, Nigeria has lost its dominance on the West coast and other African routes to Asky, AWA and the Cote d’Ivorian national carrier.

Arik was the only Nigerian airline that operated to Dakar, Abidjan, Luanda and Libreville.

Since the intervention by AMCON, it has stopped operating to most of these destinations.

The airline used to operate six flights to Accra from Abuja and Lagos, but the flights have been scaled down to two since AMCON stepped in.

According to sources in Arik, it is now uncertain if the airline will continue to operate on any of these destinations in the West coast.

“What AMCON has done is that it has cut back flights because of inadequate supply of fuel and equipment, but all the flights that it still operates are on time.

“So it has restored on time flight services, but only 30 per cent of the flights or less are still operating.

“Before their take over, Arik flights were characterised by delays and cancellations. It is really tough for AMCON to effectively manage the airline.

“We know that it will be difficult to generate the kind of revenue needed to pay overheads, salaries and still have operational funds with the scaled down services,” the Arik official said.

However, AMCON said yesterday that public confidence was gradually returning to Arik Air, two weeks after it took over the airline.

AMCON made the claim in a statement signed by its spokesperson, Jude Nwauzor, reported the News Agency of Nigeria (NAN).

Nwauzor said the new management, when the airline was taken over, was confronted with a barrage of challenges but has surmounted the problems, adding that the new team has been stabilising the airline’s operations with the few aircraft left in the fleet.

AMCON said, unlike what obtained before the take over, average On-Time-Performance (OTP) of Arik Air to different destinations had improved.

The corporation also claimed that Nigerian banks, which had turned their backs on Arik, were now cooperative and ready to support the new management.

According to the spokesperson, engagements with international and local creditors had also been successful, while discussions with critical service providers and industry stakeholders had yielded the much desired results.

“Arik has also paid the insurance premium, which was on the verge of expiring and commenced the payment of outstanding salaries, which is a great morale booster for staff.

“Arik is also in discussions with different creditors and stakeholders to recall a good number of its aircraft as soon as possible, which will increase the number of daily flights,” he said.

The corporation said a good number of passengers affected by the suspension of flights to some routes had been refunded, adding that efforts were in the works to reach out to those yet to get their refunds.

Nwauzor noted that with the positive turn of events in the airline since its take over, customers of Arik, especially from corporate circles, were gradually returning.

AMCON added that efforts aimed at improving performance within a short period had translated to a stable and professional management for the airline.

In this respect, AMCON quoted the new management as saying that efforts at reviving the airline were boosted by the fact that Arik has an unparalleled safety record that “speaks for itself in the history of aviation in the country”.

AMCON said it had also held a series of fruitful engagements and struck agreements with major suppliers of aviation fuel for regular supply to Arik to guarantee regular flights.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Bill Gates Sexual Harassment Allegations Bring Microsoft Under Spotlight

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Bill Gates

Shareholders of Microsoft have started pressuring the company to increase transparency over its sexual harassment history after recent allegations against Microsoft co-founder Bill Gates.

More than 75% of investors at the company’s annual meeting voted in favour of the tech giant publishing a report on the efficacy of the company’s sexual harassment policies, going against the company’s recommendations to reject the proposal.

Bill Gates, who is 66, resigned from the Microsoft board last year after an investigation was opened into a relationship that Gates had with a colleague, which started in 2000. This affair was only brought into the light in May this year, a few weeks after Bill Gates and Melinda Gates announced to the world their plans to get a divorce.

Since then, multiple reports have come out that Bill Gates, who co-founded the company had made repetitive unwanted advances to Microsoft employees after he and Melinda got married in 1994. Reports further stated that Bill Gates was warned about his inappropriate conduct back in 2008.

The shareholder proposal was submitted by investor Arjuna Capital, and made a call for Microsoft to put out a report on transparency which would contain details of investigations into the conduct of individual employees.

Arjuna Capital had mentioned that reports of Bill Gates’ inappropriate affairs and unwanted sexual advances made towards Microsoft employees have only magnified concerns, putting under question the culture which had been set by the very leadership of the company, as well as the role of the board in holding those responsible accountable for their actions.

The company board had encouraged shareholders to reject the proposal, with the argument that it was throwing more resources into fighting sexual harassment. It is rare to see shareholder proposals that are strongly opposed by the company pass by such a large margin.

Natasha Lamb said that while the accusations against Bill Gates are only the most recent revelations in what has been a long-standing problem, it is significant and encouraging that Microsoft is now listening to shareholders while committing to transparent and unbiased reporting.

 

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HFMP And FMN Combination: The Making of A National Champion

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HoneyWell

The contribution of key players in the Nigerian food industry has grown in value and relevance over the years. According to a report by the World Trade Organization (WTO), Nigeria is ranked as the largest food market in Africa, with significant investment in the local industry and a high level of imports. As of now, the food and beverage sector is estimated to contribute 22.5% of the manufacturing industry value, and 4.6% of Nigeria’s GDP.  In another report compiled by PricewaterhouseCoopers (PwC), it was confirmed that the food sector brought in an average of 57% of Gross domestic product (GDP) and generated 64.5% of export earnings.

Founded in 1972, Honeywell Group began as a food trading company servicing the West African region before pivoting to importing a variety of goods for the domestic Nigerian market. Now operating an investment holding company  based in Nigeria, Honeywell Group Limited has diversified its business l into different sectors which are referred to as portfolio companies. The Group has evolved to become an investment company participating in major sectors of the Nigerian economy including foods, real estate, leisure and hospitality, energy, infrastructure, and financial services.

Honeywell Flour Mills Plc (HFMP), one of the portfolio companies of Honeywell Group Limited and a market leader in milling, processing & packaging of flour and other wheat-based products in Nigeria has continued to contribute immensely to the growth and performance of the Nigerian economy. With over 20 years of experience, HFMP has gathered extensive knowledge and skill in the production of flour and a range of flour-based products. The company has superior operational efficiency and remains a dominant player in the food industry in Nigeria.

Operating on a total installed capacity of 2,610 metric tonnes per day, HFMP manufactures a variety of products from wheat meals, semolina, noodles, superfine flours to spaghetti, macaroni, brown flour, amongst others.

During the company’s recent Annual General Meeting (AGM) which was held on October 14, 2021, the company recorded an all-time high revenue of N109.5 billion, an increase of 36% over N80.4 billion for the financial year ending March 2021. The company’s Operating Profit also grew faster than revenue at 39%, from N5.4 billion in FY 2019 to N7.6 billion in FY 2020.

Just recently, the Honeywell Group Limited announced the signing of an agreement with Flour Mills of Nigeria Plc (FMN) on the proposed combination of Honeywell Flour Mills Plc and Flour Mills of Nigeria, another leading Nigerian food manufacturer to further enhance food security in the country and create a more resilient national champion in the Nigerian foods industry. This agreement will have Honeywell Group Limited dispose of a 71.69% stake it has in HFMP to FMN.

Building on the achievements and improved performances of HFMP and FMN year-on-year, it can be seen that this is a combination of two giants in the food manufacturing industry in Nigeria. With more than the 85-year combined track record of both companies and their shared goal of making affordable food available to Nigeria’s population, stakeholders will benefit from this combination in numerous ways.

Based on the scale of the transaction that will be carried out by the consolidated company, this will provide employees with more career development opportunities in a larger organisation, with the potential to create more jobs in the economy. Customers will also benefit from access to a wider product range and an even stronger stream of innovation that can only be delivered by a combined entity with stronger teams and financial muscle. In addition, Nigeria and its food security agenda will benefit from both companies’ focus on developing Nigeria’s industrial capability, its agricultural value chain and specifically backward integration of the food industry.

The proposed combination will bring together two trusted and entrenched brands, creating a single entity of becoming a national champion in the food manufacturing space that is better positioned to benefit the growing Nigerian population and leverage opportunities stemming from the African Continent Free Trade Area (AfCFTA).

As this deal comes to a close, Honeywell Group, a leading investment company is setting its sights on the journey of refining and growing its investment portfolio. This will see it consolidate in sectors where it currently operates, such as real estate, energy, financial services, infrastructure. The company also intends to announce more strategic initiatives in the coming months.

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MTN Nigeria Begins Sale of 575 Million Shares to Retail Investors

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MTN Nigeria - Investors King

Telecommunication giant, MTN, will today begins the sale of up to 575 million shares held in MTN Nigeria by MTN Group to Nigerian retail and institutional investors.

The announcement of the sale is coming a week after the company disclosed that the Security and Exchange Commission (SEC) had approved its offer for sale of up to 575 million ordinary shares by way of a bookbuild to qualified investors (Institutional Offer) and a fixed price to retail investors (Retail Offer).

The company’s Chief Executive Officer, Karl Toriola, talking about the sale of the shares yesterday in a press conference clarified that the sale of the shares was never an initiative of funds raising but an attempt to deepen the company’s shareholding and in order to enable more Nigerians to partake in the prosperity of the company.

The offer opens at 8:00am today and is scheduled to close at 5:00 pm on December14, 2021. It is priced at N169.00 per share and the minimum subscription is for 20 shares and lots of 20 shares thereafter. The offer includes an incentive in the form of one free share for every 20 shares purchased, subject to a maximum of 250 free shares per investor. The incentive is open to retail investors who buy and hold the shares allotted to them for at least 12 months, post the allotment date,” the CEO said.

The retail offer is the first in Nigeria to be delivered via a digital platform. It aims to facilitate the maximum possible participation by Nigerian investors leveraging on technology. Similarly, It is the first time the company will invite subscription from the public nearly two years after it listed on the Nigerian Exchange Limited (NGX).

Speaking about the offer, MTN Group President and Chief Executive Officer, Ralph Mupita, said the offer was MTN’s strategic priority to create shared value. “In the last 20 years, we have worked diligently to connect 68 million subscribers onto voice and data networks and ensure that we deliver the benefits of a modern connected life. With this offer, we will contribute to the further deepening of Nigeria’s equity capital markets. It is the first in a series of transactions as MTN Group implements its plans to ensure broad-based ownership by reducing its shareholding in MTN Nigeria to 65 per cent over time. We thank the Nigerian authorities for the support we as MTN Group have received in the various approvals related to this Offer, and remain committed to playing our humble role in driving digital and financial inclusion across the country over the medium-term, ” he added.

Investors will be able to submit applications through the issuing houses, receiving agents (authorised stockbrokers and Nigerian banks) and online via a unique digital application platform, Primary Offer, administered by the Nigerian Exchange Limited.

 

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