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Custodian Investment to Purchase 51% Stake in UACN Property Company

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Custodian Investment Plc - Investors King

Custodian Investment to Acquire 9.5bn Shares in UACN Property Company

The management of UAC of Nigeria Plc on Monday announced that they have entered into a binding agreement with Custodian Investment Plc for Custodian to acquire a 51 percent equity interest in UACN Property Development Company Plc (UPDC) from UAC.

In the statement released by the UAC of Nigeria on the Nigerian Stock Exchange, the company said Custodian will acquire 9,465,584,668 UPDC ordinary shares held by UAC, representing 51 percent of UPDC’s issued share capital.

The company further stated that the sale of shares will be done in two tranches.

The first phase includes an initial sale of 946,558,467 shares, representing 5.10 percent of the issued capital of UPDC, on the execution of binding transaction agreements.

This will be followed by a sale of 8,519,026,201 shares, representing 45.90 percent of the issued share cpaital of UPDC upon receipt of requisite approvals.

According to UAC, the agreement marks the start of a new partnership between Custodian and UAC that will achieve both companies’ objectives in the real estate sector. It also marks a significant milestone aligned with UAC’s strategy to focus on its core businesses.

Commenting on the partnership, Wole Oshin, Group Managing Director of Custodian Investment PLC, said: “We at Custodian are excited about the possibilities arising from this partnership with UAC which provides multiple levers for value creation. The rationale for the Transaction is that Custodian and UAC share the view that their ambitions for capturing opportunity in the real estate industry will be better achieved working in partnership.

“UPDC is one of Nigeria’s leading real estate development companies, having completed several landmark residential and commercial developments over the past twenty years. This Transaction will provide Custodian with a platform to capture arising real estate opportunities. It also immediately provides recurring cash flow visibility and attractive yields as a result of its direct exposure to Nigeria’s leading real estate investment trust (“UPDC REIT”) with a track record of profitability and annual dividend distribution which offers a good compliment for our product portfolio.

“We are confident that the recent recapitalisation of UPDC, significant reduction in finance costs, and recently reconstituted leadership have repositioned the company to operate sustainably and capture growth opportunities aimed at increasing stakeholder value going forward.”

Also, commenting on the deal was Folasope Aiyesimoju, Group Managing Director of UAC, Aiyesimoju said: “The Transaction is a significant step in achieving our objectives for UPDC. In 2018, the Board and management of UAC embarked on a strategic review to evaluate the performance of the company and its subsidiaries. The objective was to achieve sustainable positive financial performance from our existing operations and enable management focus on businesses that align with our strategy.

“In reviewing UPDC, the Board weighed the long-term opportunities in the Nigerian real estate sector against the fundamental differences between the cash flow profile and capital needs of UPDC and those of the other entities in UAC’s portfolio. Following its review, the Board concluded that it would be in the best interest of UAC to exit its interest in the real estate sector, allowing UPDC to operate as a standalone legal entity, free to source appropriately structured capital and to unlock value for its shareholders.

“In September 2019, the Boards of Directors of UAC and UPDC jointly announced three significant strategic initiatives aimed at strengthening UPDC and positioning the company to operate as a standalone entity. This included a rights issue to recapitalise the business, plans for UAC to transfer UAC’s equity interest in UPDC pro-rata to UAC’s shareholders (“UPDC Unbundling”), and plans for UPDC to unbundle the UPDC REIT to its shareholders (“UPDC REIT Unbundling”). The ₦16 billion UPDC rights issue was successfully completed in April 2020, proceeds of which were used to reduce borrowing costs and significantly improve UPDC’s capital position.

“In the process of progressing the unbundling initiatives, UAC received a credible offer from Custodian. The terms of the offer compelled the Board to re-evaluate the planned approach to deconsolidate UPDC and influenced the Board’s decision to proceed with the sale of a portion of UAC’s interest in UPDC to Custodian, effectively putting an end to the UPDC Unbundling.

“We are delighted about the positive impact that a strong anchor shareholder like Custodian will have on UPDC and are focused on ensuring a smooth transition.”

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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Guinness Nigeria Returns to Profitability For the Quarter Ended September 2021

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Guinness - Investors King

The financial results of Guinness Nigeria for the quarter ended September 2021 show a return to profitability for the Beverages Giant during the period compared to a loss made in the prior period.

This return to profitability was driven by a huge jump in revenue from N30 Billion in the same quarter of 2020 to N47.4 Billion in 2021, although the cost of sales also increased from N23 Billion 2020 to N32.2 Billion filed in 2021 thereby giving an increase in gross profit from N7 Billion in 2020 to N15.2 Billion in the quarter under review

Guinness Nigeria increased its marketing and distribution expenses during the period, marketing and distribution expenses rose from N4.6 Billion in 2020 to N6.5 Billion in 2021. This led to a huge jump in Operating profit for the period, operating profit jumped from just N586 Million in 2020 to N6.5 Billion in 2021. This culminated in profit for the period rising to N4 Billion from a loss of N841 Million posted in 2020.

The Chairman, Board of Directors of Guinness Nigeria Plc, Dr. Omobola Johnson maintained that the Company will keep up with its growth strategy to continue on its path of profitability. He said “We are confident that our strategy is comprehensive and robust. We are keen on making the right investments that will drive growth across the board and ensure our competitiveness, despite the challenging business environment. We thank our shareholders for their confidence in the Board and Management of our dear company and we are committed to ensuring that we sustain the momentum.”

Guinness Nigeria is the Nigerian subsidiary of the Irish brand Guinness. Its principal activities continue to be brewing, packaging, marketing, and selling of Guinness Foreign Extra Stout, Guinness Smooth, Malta Guinness, Guinness Gold, Harp Lager, Smirnoff Ice, Satzenbrau Lager, Dubic Malt, Snapp, Orijin Spirit Mixed Drink, Orijin Bitters, Smirnoff Ice Double Black with Guarana, Orijin Zero, and Orijin Herbal Gin, Baileys Delight, Gordons Moringa among others.

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FBNHoldings Renews Adesola Adeduntan Tenure, Appoints Nnamdi Okonkwo as GMD

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Dr. Adesola Adeduntan - FirstBank CEO - Investors King

The Board of FBN Holdings Plc (FBNHoldings) has appointed the immediate past Managing Director of Fidelity Bank Plc., Mr. Nnamdi Okonkwo as its Group Managing Director.

Okonkwo’s appointment takes effect from January 1, 2022.

His appointment followed the retirement of Mr. U.K. Eke, who has completed his two-term tenure.

Uke, according to the board, tendered his Notice of Retirement on August 10, 2021

The Board further announced the renewal of the appointments of Dr. Adesola Adeduntan and Mr. Gbenga Shobo as the Managing Director and Deputy Managing Director of FirstBank respectively, for another term.

In the same vein, the Board announced the renewal of appointments of Mr. Kayode Akinkugbe and Mr. Taiwo Okeowo as the Managing Director and Deputy Managing Director of FBNQuest Merchant Bank Limited respectively, for another term.

“Uke’s retirement takes effect at the end of the current Financial Year on December 31, 2021. Mr. Eke’s retirement follows from a 35 years’ career in financial services, strategy, auditing, consulting, taxation, process reengineering and capital market operations.

“FBNHoldings Board has also announced that Eke will be succeeded by Mr. Nnamdi Okonkwo, a focused and result-oriented top banker, who will assume office as Group Managing Director, FBN Holdings Plc effective January 1, 2022,” Seye Kosoko, the Company Secretary said

Okonkwo, the immediate past Chief Executive Officer of Fidelity Bank Plc, brings to bear on the Board of FBNHoldings more than 30 years unbroken banking career spanning local and international experience. He has a wealth of experience in transformational leadership, business strategy development and visioning, innovative corporate governance and risk management.

He has led the transformation of banks, with the most recent being Fidelity Bank, where he led the management team for seven years to achieve remarkable results culminating in tripling profit and shareholder value.

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Are There Better Ways to Help Consumers Tackle Social and Environmental Problems?

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Consumers - Investors King

Techniques used by online microfinance platforms to spur user involvement could be useful in helping organisations to persuade people to behave in ways that benefit both society and environment.

Microfinance platforms have popularised the idea that ordinary people can become bankers to the poor. Communities of lenders get together every day to crowdfund microloans to disadvantaged micro-entrepreneurs by investing small sums of around only 25 dollars.

A new study digs into the universe of these microloan platforms to investigate how they manage to attract investors and perpetuate their enthusiasm for responding to social problems such as poverty.

Researchers from the Universities of Birmingham and Southern Denmark have identified two major ways through which platforms maintain and potentiate lending. Their findings are published in the Journal of Consumer Research.

Firstly, the platforms assemble resources that function as an ‘apparatus of affirmation’ – providing first-hand evidence of impact that help consumers imagine the benefits of their actions, thereby creating a sense of empowerment.

Secondly, the platforms translate complex and distant social problems, such as poverty, into personal encounters between lenders and borrowers – creating a sense of connection and familiarity via photographs, stories and loan updates. This set of techniques is theorised as the ‘apparatus of relatability’.

Co-author Dr Pilar Rojas-Gaviria, Lecturer in Marketing at the University of Birmingham, comments: “Organisations such as microlending platforms, which strive to mobilise responsible consumers, face two key challenges – overcoming the powerlessness felt when facing daunting problems, and removing a sense of disconnection from ‘faraway’ problems.

“Supplementing the power of ideas and knowledge with personal stories that inspire hope and aspiration, affinity and connection are powerful techniques that could be useful in inspiring consumers to more actively participate in efforts to tackle social and environmental problems, such as climate change.”

Through storytelling, imagery, platform design and communication, the researchers note that online microlending platforms nurture a feeling that genuine change is possible through affordable actions. They also develop a sense of affinity and empathy among potential investors with aspiring micro-entrepreneurs, particularly those from Low-and Middle-income Countries (LMIC).

For example, the platforms publish loan requests to showcase individual borrowers with first names, photographs, and short biographies. This personalised strategy effectively frames microlending as a virtual encounter with a borrower and their story of micro-entrepreneurship. Celebrities, such as actor Natalie Portman, have over the past years helped the microfinance industry to promote microloans as an act of hope that empowers resourceful poor in their efforts to escape poverty.

Co-author Domen Bajde, from the University of Southern Denmark comments: “The advent of online microlending has expanded the pool of potential investors to anyone with internet access and $25 to spare.

“After learning that lenders were more interested in ’emotional returns’ rather than financial profit from their loans, platforms began to dramatise microlending as an act of aspirational hope and affinity toward the entrepreneurial poor.”

The research is also significant for charitable giving, noting that donors are more likely to contribute when they see their donations as a way of empowering the disadvantaged and when donations are experienced as impactful investments.

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