- Buhari Gives Approval for Private Investments in Refineries
President Muhammadu Buhari has approved the implementation of a new commercial model that will allow private investors to invest in restoring the operational efficiency of the country’s refineries, the Nigerian National Petroleum Corporation has said.
According to the NNPC, the presidential approval was given to enable the national oil firm revamp the struggling refineries located in Port Harcourt, Warri and Kaduna.
It stated that Buhari approved the engagement of strategic investors who would come in with refining and funding expertise to partner local investors who understand Nigeria’s downstream oil market so as to enhance the performance of the refineries.
Over the years, the refineries had operated below their various capacities, a development that the Minister State for Petroleum, Ibe Kachikwu, described as worrisome, making him to express fears that the facilities might end up as small scraps if nothing serious was done by government.
The Chief Operating Officer for Refineries, NNPC, Mr. Anibor Kragha, stated that under the new model, this would change as capital investments would come from investors who would be repaid from incremental production of the refineries on agreed terms.
Kragha, who spoke during a plenary at the ongoing Nigeria Oil and Gas Conference in Abuja on Wednesday, explained that the corporation would not sell equities in the refineries to any of the investors, but that the arrangement would be based on invest, operate for a period and earn returns on investments.
The oil firm, according to him, has met with the original builders of the Kaduna and Port Harcourt refineries, Chiyoda and JGC, to undertake technical appraisal of the refineries, from which the final funding model under the new arrangement would be agreed.
Kragha said, “Because of what is happening and the global trend, President Muhammadu Buhari gave approval for strategic investments to be made in the refineries. So, the investment model is basically this way: strategic investors who can bring refining expertise and funding will partner local players with downstream experience to actually go into the refineries, invest money and within 24 months to get us to 90 per cent capacity utilisation.
“We are in the preparation stage. We had meetings with Chiyoda, who is the original refinery builder of Kaduna (refinery) and JGC, who built Port Harcourt, and the idea for going with them is that because they do this consistently, they have access and we expect them to open their supply access to us to enable us get parts and pricing at better rates.”
He added, “We are getting a lot of interests and expressions from a wide range of people. GE has a consortium they are bringing, there is Eni and Oando as well. The ORB (original refinery builder) will sit together and come up with an aligned cost that we will put into financial models.
“The only way we are going to do this is that they will only get paid from incremental revenues that are generated by incremental production from the refineries. Essentially, they have to put their money where their mouth is and because we have technical expertise and funding, we can make these refineries work.”
SEC Warns Against Proliferation of Unregistered Investment Platforms
The Securities and Exchange Commission (SEC) has warned the investing public to be wary of the proliferation of unregistered online investment and trading platforms facilitating access to trading in securities listed in foreign markets.
SEC’s warning was conveyed via a circular issued in Abuja, Thursday to capital market operators.
It advised the investing public to seek clarification as may be required via its established channels of communication on investment products.
The circular read: “The attention of the SEC has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on securities exchanges registered in other jurisdictions.
“These platforms also claim to be operating in partnership with capital market operators (CMOs) registered with the Commission.”
The Commission categorically stated that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.
Accordingly, the SEC notified CMOs who work in concert with the referenced online platforms of the Commission’s position and advised them to desist henceforth.
Public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.
SoftBank Reaps $33 Billion Coupang Windfall
SoftBank Group Corp on Thursday racked up a roughly $33 billion gain on paper through the public market debut of South Korea’s largest e-commerce company, Coupang Inc, the latest sign of a dramatic turnaround for its $100 billion Vision Fund.
Shares of Coupang opened 81% above their offer price on Thursday, after the company raised $4.6 billion in the U.S. stock market’s biggest initial public offering this year.
SoftBank paid around $3 billion for a 37% stake in the company, according to sources familiar with earlier fund-raising, giving it a roughly $33 billion headline profit if prices hold.
Coupang’s hugely successful stock market launch is welcome news for SoftBank, which is grappling with the collapse of billions of dollars worth of funds linked to Britain’s Greensill Capital, a supply chain finance start-up.
Vision Fund is Greensill’s biggest backer.
The Japanese conglomerate last month reported third-quarter net profit ballooned more than 20 times thanks to a recovery at the Vision Fund, a huge venture capital operation famous for investing early in Uber and other tech industry startup successes.
Only a year ago, SoftBank had been smarting from the flopped IPO and collapse in value of office sharing firm WeWork, raising questions over whether Chief Executive Officer Masayoshi Son had lost his midas touch and threatening plans to establish a successor to Vision.
The COVID-19 pandemic has also forced Son to sell assets but a second deal reported by Reuters on Thursday bodes well for VF II, a second, smaller fund.
The $225 million late-stage funding round for healthcare startup Forward Health was its first major investment this year, following a pickup in activity and the group’s fortunes in the second half of 2020.
The Vision Fund also made $11 billion on a blockbuster market launch of DoorDash Inc in December, which valued the food delivery company at more than $70 billion.
It also made gains on home seller Opendoor Technologies Inc’s initial offering in December.
The fund still holds large stakes in China’s biggest ride-hailing firm Didi, as well as Uber’s Southeast Asian rival Grab.
SoftBank is also trying to ride the mania for special purpose acquisition companies, launching a handful of blank-check firms this year, although none of them have found investment targets yet.
Agence Francaise De Developpement (AFD) To €2 billion in Nigeria
The French Development Agency (AFD) is a development finance institution 100 percent held by the French government.
In Nigeria, it is mainly into financing infrastructure projects (water, energy, transport and agriculture).
It also involves financing related to the banking sector, governance and the cultural and creative industries.
Speaking to the media, the AFD Country Director Nigeria, Pascal Grangereau, said €2 billion was set aside to be sent on mainly road financing, water sector, improvement in electricity and agriculture.
He said €300 million was being spent on the Abuja Electricity Backup, a project in collaboration with Transmission Company of Nigeria (TCN) to improve electricity at the nation’s capital.
Grangereau said a total of €200 million is equally expended on the North West Electricity Backup.
On agriculture, he said vocational training is currently held across the nation to improve the skills of Nigerians.
He added: “We intend to finance agricultural projects in five states, Benue, Imo and three other states to the tune of €50 million.”
He lamented that while it was endowed with reserves of crude oil and natural gas, Nigeria is characterised by power generation considered by the Nigerians themselves as not adequate.
He said concentrating more than half of the installed electricity capacity in West Africa, only half of which was harnessed by the country, implying a very low per capita consumption, limited access to electricity and frequent load shedding.
He added: “The sector is of strategic importance for successive governments, with the launching in the 2000s of a vast reform, supported by a massive investment plan; which reform although supported by the donors is yet to achieve the expected results. The project aims to strengthen the electricity transmission network, natural monopoly under the responsibility of the public company TCN, thus laying the foundations for a long-term partnership with TCN.”
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