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FG Reappoints Consortium of Banks to Handle $2.5bn Eurobond

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Federation Account Allocation Committee
  • FG Reappoints Consortium of Banks to Handle $2.5bn Eurobond

The Federal Executive Council on Wednesday reappointed a consortium of banks to handle the nation’s $2.5bn Eurobond issuance.

The Minister of Finance, Mrs. Kemi Adeosun, disclosed this to State House correspondents at the end of the weekly FEC meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja.

Adeosun listed the banks as Citi Group, Standard Chartered, Stanbic IBTC, Whitten-Case and African Practice.

She said the proceeds of the $500m bond issued in November 2017, which she put at about N162.50bn, were used to redeem Nigerian Treasury Bills, which matured in December 2017.

“The immediate impact was a significant drop in the bid rates at the auctions of both the NTBs and FGN Bonds in December 2017 and January 2018,” she stated.

According to the minister, the NTBs dropped from about 16 per cent to 13 per cent, while the bonds dropped from about 16 to 16.50 per cent to 13.50 per cent.

The Minister of State for Aviation, Hadi Sirika, said the council approved the substitution of Lufthansa Consulting with the Airline Management Group and Avia Solutions GE to join the other members of the consortium that would provide transaction advisory services for the establishment of a national carrier at the same cost of N341.2m.

He stated, “Today, the council considered a memo from transportation regarding aviation. It was a memo that was brought to substitute a member of the consortium that will provide transaction advisory services for the establishment of the national carrier. That member of the consortium is Messers Lufthansa Consulting.

“Council considered and approved that substitution with another company called AMG (Airline Management Group) with Avia Solutions GE to join the other members of the consortium to continue providing that at the same cost of N341.2m.”

Sirika attributed the substitution to two reasons, “One, that particular member of the consortium, Lufthansa Consulting, in the wisdom of the council, we felt that Lufthansa Consulting is an appendage of the airline group and that might bring conflict of interests because Lufthansa themselves may want to join, partner or help in the process during the procurement phase of this transaction.

“Of course, they are members of Star Alliance, members of One World and members of Sky Team, others may feel short-changed that the person advising us to set up this airline, which is going to be private sector-driven, is a member of an alliance, which they are not part of.

“Secondly, since we appointed the transaction advisers in various aviation projects in May 2017, about six of them; five of them have gone ahead, the one for construction of airport, the one for aerotropolis and the one for MRO and so on and so forth. Most of them have produced the outline business cases and we are on our way to doing the full business case.

“However, Lufthansa Consulting did not accept the offer, neither have they signed any contract. They countered the offer instead.

“One of the conditions is that we should pay them 75 per cent of the total cost, which is against our procurement law; they also wanted us to change the contract from naira to euro; they also wanted us to open an escrow account in an internationally recognised bank outside the country where the money will be domiciled.”

Sirika added, “So, we found that that was against our procurement law and we have been going back and forth for seven months to see whether they can accept the terms of conditions and even if they had done at a time and they didn’t up till today; we couldn’t continue with them because it will compromise the system, which we thought should be transparent.

“So, that is why we sought the approval of council to substitute them why a neutral person and someone who will accept the terms and conditions given – to accept payment in naira, to accept 15 per cent payment of the entire cost as against 75 per cent etc.”

On his part, the Minister of Interior, Abdulrahman Dambazau, said FEC approved the purchase of 35 operational vehicles for the Nigeria Immigration Service at a cost of N483.21m, including the cost of painting the vehicles in NIS colours for N4.09m.

He said the present administration had approved 17 memos for various procurement and others.

The Minister of Communications, Adebayo Shittu, said the council also approved the purchase of equipment to detect illegal radio signals with a view to blocking them.

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 Sugar Refinery Raises ₦42.79 Billion in Successful Commercial Paper Issuance

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Dangote Sugar Refinery Plc

Dangote Sugar Refinery PLC has successfully raised ₦42.79 billion through the issuance of Series 4 and 5 Commercial Paper notes.

The issuance, announced on Friday, underscores the company’s robust financial strategy and strong market confidence in its operations.

The Series 4 notes, amounting to ₦12.93 billion, were issued for a tenure of 181 days with a yield of 23.00%.

The Series 5 notes, on the other hand, totaled ₦29.86 billion, were issued for a tenure of 265 days, and offered a yield of 25.00%. These notes were issued under the company’s ₦150 billion Commercial Paper Issuance Programme.

The issuance saw substantial participation from a diverse group of investors, including Pension and Non-Pension Asset Managers, as well as other institutional and individual investors.

This broad interest highlights the trust and confidence the market has in Dangote Sugar Refinery’s financial health and operational strategy.

Mrs. Temitope Hassan, Company Secretary and Legal Adviser of Dangote Sugar Refinery PLC, expressed her satisfaction with the successful issuance.

“This achievement is a testament to the strong investor confidence in Dangote Sugar Refinery’s business model and financial stability. The funds raised will be instrumental in supporting our short-term working capital and funding requirements, enabling us to continue our growth trajectory and maintain operational excellence.”

The successful issuance of the commercial paper notes aligns with Dangote Sugar Refinery’s strategic objectives of maintaining a flexible and diversified funding base.

By tapping into the commercial paper market, the company ensures that it has the necessary liquidity to meet its operational needs while also positioning itself to take advantage of growth opportunities in the competitive sugar industry.

Dangote Sugar Refinery PLC, a subsidiary of the Dangote Group, remains one of Nigeria’s leading sugar producers.

The company continues to play a pivotal role in the country’s sugar industry, contributing significantly to the economy and ensuring the availability of high-quality sugar products for consumers.

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Dangote Group Expands Refinery Storage Capacity to 5.3 Billion Litres

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Dangote Refinery

The Dangote Group has announced a significant expansion of its refinery storage capacity.

The expansion, disclosed by Alhaji Aliko Dangote, President of the Dangote Group, during his address at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.

Currently boasting a storage capacity of 4.78 billion litres, the Dangote Petrochemical Refinery is set to increase this figure by an additional 600 million litres, bringing the total capacity to an impressive 5.3 billion litres.

This expansion underscores Dangote’s commitment to transforming Nigeria into a hub for refined petroleum products and solidifies the refinery’s role as a strategic reserve for the nation.

Addressing stakeholders at the forum, Dangote highlighted the refinery’s pivotal role in addressing longstanding challenges in Nigeria’s energy sector, particularly the absence of strategic reserves for petrol.

“The country doesn’t have strategic reserves in terms of petrol, which is very dangerous. But in our plant now, when you came, we had only 4.78 billion litres of various tankage capacity. But right now, we’re adding another 600 million,” Dangote affirmed.

The expansion comes amidst various operational challenges faced by the refinery, including attempts by international oil companies to hinder its operations.

Dangote asserted that these challenges, aimed at impeding the success of the refinery, were indicative of broader resistance to change within the oil industry.

“We borrowed the money based on our balance sheet. I think we borrowed just over $5.5bn. But we paid also a lot of interest as we went along, because the project was delayed because of a lack of land, also the sand-filling took a long time,” Dangote revealed, emphasizing the resilience required to overcome these obstacles.

Moreover, Dangote expressed optimism regarding the refinery’s capacity to influence regional fuel prices, citing the success story of diesel price reduction following the refinery’s market entry.

He indicated that while petrol pricing remains a complex issue governed by governmental policies, the refinery’s operations would strive to offer competitive pricing and supply stability.

The expansion of the Dangote Petrochemical Refinery not only marks a significant milestone in Nigeria’s industrial landscape but also positions the conglomerate as a key player in reshaping Africa’s energy dynamics.

As construction progresses towards completion, the refinery aims to further consolidate its role in meeting regional energy demands and fostering economic growth across West Africa.

With plans to commence sales of refined products in the coming months, Dangote’s refinery is poised to play a transformative role in Nigeria’s quest for energy independence and regional economic integration.

As stakeholders await the refinery’s operational debut, expectations are high for its potential to drive down fuel prices and enhance energy security across the region.

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Musk Secures Shareholder Support for Compensation and Texas Relocation

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Elon Musk

Tesla Inc. shareholders have voted in favor of Chief Executive Officer Elon Musk’s compensation package and the company’s state of incorporation change to Texas.

The results, announced at Tesla’s annual meeting in Austin on Thursday, reflect shareholder approval despite challenges such as declining sales and a significant drop in stock price.

Musk had hinted at the likely outcome the night before the meeting in a post on X, stating that both resolutions were “passing by wide margins.”

The electric car manufacturer did not disclose the detailed breakdown of the votes.

The approval of Musk’s pay package, although advisory, demonstrates continued investor support for his leadership.

The package had previously been nullified by a Delaware judge in January, but Tesla plans to appeal. Should the appeal fail, relocating Tesla’s legal home to Texas may provide the board an opportunity to reintroduce the compensation plan under potentially more favorable legal conditions.

Originally approved in 2018 with 73% of the vote, Musk’s compensation plan makes him eligible for up to $55.8 billion in stock options if Tesla achieves specific milestones.

Currently, the value of these options is approximately $48.4 billion, according to the Bloomberg Billionaires Index.

Musk’s leadership has been a topic of significant debate, particularly in light of his oversight of six companies and his tendency toward abrupt strategic changes.

Earlier this year, Musk orchestrated Tesla’s largest layoffs to date, only to rehire some of the affected workers weeks later.

In addition to the compensation package, shareholders voted to reelect James Murdoch and Kimbal Musk to Tesla’s board.

Murdoch, son of media mogul Rupert Murdoch, has served on the board since 2017, while Kimbal Musk, Elon’s younger brother, has been a member since 2004.

Tesla’s stock saw a modest increase of 0.3% in extended trading following the announcement, though the stock had fallen about 27% over the year compared to a 14% gain in the S&P 500 Index.

During the annual meeting, held at Tesla’s Austin headquarters, shareholders showed enthusiastic support as Musk took the stage in a black Cybertruck T-shirt.

He shared updates on the company’s progress, including the introduction of three new models, the expansion of the Supercharger network, and record production levels for Cybertrucks.

“A lot of people said Cybertruck was fake, never going to come out. Now we’re shipping a lot of Cybertrucks,” Musk stated.

In addressing his substantial pay package, Musk clarified that it is structured as options requiring him to hold Tesla stock for five years. “I can’t cut and run, nor would I want to,” he said.

The push for shareholder support involved a dedicated “Vote Tesla” website and advertising on X, with Tesla investors and executives vocalizing their backing for Musk.

Despite some opposition from significant investors like Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the measures passed.

The relocation to Texas has been formalized, with the certificate of conversion available on the Texas Secretary of State website.

However, any future compensation plan will need to be restructured to comply with Texas legal standards, should the Delaware appeal fail.

The recent shareholder vote may enhance Tesla’s position in the forthcoming appeal. Delaware Chancery Court Judge Kathaleen St. Jude McCormick’s January decision to void the compensation package cited conflicts of interest and inadequate disclosure.

The appeal’s outcome, expected later this year, will determine the next steps for Musk’s compensation plan.

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