UBA Appoints New Deputy Managing Directors for its Growing Business
United Bank for Africa Plc (UBA) announced the appointments of Ayoku Liadi and Oliver Alawuba as the Deputy Managing Directors in charge of UBA’s Nigeria and Africa businesses, respectively.
In a statement issued by the bank and released on the Exchange’s website, the bank said the creation of the new positions represents further strategic recognition of the bank’s pan-African business growth.
The lender explained that its pan-African business now accounts for over 40 percent of its Group revenue, while Nigeria remains the bank’s largest market.
According to the bank, the new Deputy Managing Directors will report directly to the Group Chief Executive Officer (CEO), Kennedy Uzoka.
Speaking on the new appointments, Tony O. Elumelu, Group Chairman, said “In 2005, we set out our pan-African vision. Fifteen years later, we are present in 20 African countries, serving over 20 million clients, leveraging our service culture and technology platform, to provide an integrated and seamless customer offering across the continent.
“In Africa, we lead in innovation and service, whilst our International Business, operating from New York, Paris and London, provides global and African clients access to treasury, trade finance and corporate banking products, uniquely tailored to the African opportunity. These senior appointments represent our commitment to optimise our management structure to best serve our clients and drive our business success.”
Experts Reacts to Shoprite Planned Exit From Nigeria
Shoprite Planned Exit Triggers Experts Reaction
Experts have expressed their concerns over the decision of Shoprite Holding Limited to exit the Nigerian Market, Africa’s largest economy, at a period that unemployment is projected to hit 39.4 million.
On Monday, Africa’s largest retail company, Shoprite, announced it would commence a former process of exiting the Nigerian market or sell a major stake to willing investors that it claimed have started approaching its organisation for a possible partnership.
Experts, who spoke with our correspondents, said the decision would worsen Nigeria’s present economic position, especially with Osinbajo-led committee predicting that unemployment could hit 39.4 million in 2020.
Dr. Musa Yusuf, the Director-General, Lagos Chamber of Commerce and Industry, said the Shoprite move would impact investors’ interest in Nigeria. Yusuf is likely making reference to a series of other factors hurting Nigeria’s economic outlook in recent months.
Barely a month ago, OPay, one of Nigeria’s promising startups started by a Chinese company, announced it will be shutting down some of its business units in Nigeria due to harsh business environment and other COVID-19 related issues. That was a company that raised about $270 million about a year ago.
The series of uncertainties hurting businesses amid unclear economic path have left many investors and businesses seeking exit plan. Even at that, several of the foreign-owned businesses and investments are stuck in the country with their owners unable to access foreign exchange to repatriate their funds.
A recent report showed the Central Bank of Nigeria has over $5 billion forex backlog, yet the nation’s external reserves is hovering around $36 billion since plunging from $45 billion in June 2019.
Prof. Uche Uwalaka, a professor of Capital Market at Nasarawa State University in Keffi, said, “The exit of Shoprite, or any other foreign business for that matter, ordinarily should be a cause for concern especially for a country like Nigeria that is in dire need of foreign direct investment.”
“The importance of Foreign Direct investment, especially in the area of job creation cannot be overemphasised.”
Speaking on the matter, Samed Olukoya, CEO/Founder Investors King Ltd, explained that “Shoprite just upped Nigeria’s economic uncertainties barely a month after OPay and other foreign-owned companies commenced their process of shutting down or have already shut down part or most of their operations in Nigeria.
He added that “at this rate, it would be hard to increase capital importation or boost the nation’s Foreign Direct Investment with negative economic outlook and weak investment sentiment.”
Custodian Investment to Purchase 51% Stake in UACN Property Company
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.”
Forex Scarcity Weighs on Manufacturing Sector
Manufacturing Sector Suffers from Lack of Dollar Liquidity
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, has said lack of dollar availability continues to weigh on the manufacturing sector in the first half of the year as the sector recorded its third consecutive month of contraction in the month of July.
According to Yusuf, several manufacturers had to source for forex on the black market, increasing scarcity on the already stressed section of the forex even more. This, other experts have blamed for the high Dollar-Naira exchange rate on the black market.
On Monday, the Naira was exchanged at N473 to a US dollar on the parallel market popularly known as the black market. The local currency gained N2 from the N475 it was exchanged before the Sallah holiday to N473 on Monday when the market opened.
“Across, practically, all sectors, we are experiencing cost escalation, loss of credit lines enjoyed from foreign creditors, forex remittance challenges and many more. We need an urgent response from the CBN to calm the situation and restore confidence in our foreign exchange management framework,” Yusuf stated.
The Lagos Chamber of Commerce and Industry said most of its 2,000 members have been hit by the dollar shortage and wide foreign exchange rate that is presently eroding their profits.
“If the situation persists, it will lead to lay-offs. If you are not producing, there will be a shortage of goods in the market, prices will go up,” he added
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