Hello and welcome once again to Nairametrics’ Corporate News Roundup. This is a summary of the major company news stories that made headlines during the week that ended November 19, 2022. This newsletter is brought to you courtesy of Quidax.
Let’s begin with the main stories…
Is MTN Nigeria trying to become a dominant competitor?
As you may have heard, Nigerian telecom operators are set to bid for two additional 3.5GHz spectrum licenses during an auction scheduled for December 2022. From the looks of things, it is going to be quite competitive. All the major telcos have shown interest, including MTN Nigeria.
Last week, MTN explained that it needs another 3.5GHz spectrum band to enable it to deliver 5G service more efficiently. The fascinating thing though is that MTN earlier won the bid to acquire one of the first two 3.5GHz spectrum licenses which the NCC auctioned last year.
If MTN Nigeria is allowed to partake in the next auction round, it could potentially put other operators at a disadvantage. That’s because MTN has the money and could easily cough out the $273.6 million base bidding price and even more. Therefore, winning the auction would give MTN an undue advantage to thrive in the data market, especially with regard to 5G technology. And this could very well position the company on the path to becoming a dominant competitor.
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Meanwhile, Airtel Nigeria is feeling intimate…
Airtel Nigeria also wants to participate in the auction but is worried about the outcome. To this end, the company asked the Nigerian Communications Commission (NCC) to administratively assign it one of the remaining 3.5GHz spectrum lots at the reserve price of $273.6 million. In other words, the NCC should allow Airtel to buy one of the licenses for $273.6 million now instead of allowing the outcome of the bidding process to determine who eventually gets to buy it. As you can expect, the NCC declined the request.
There is a good reason Airtel made the request, and that’s because the price of the license could potentially go as high as $400 million if it goes to auction. And with MTN showing interest in getting another spectrum, the whole auction could end up with Airtel not being able to get any 3.5GHz spectrum license soon. And the implication is that the company won’t be able to launch 5G, and will therefore be left behind.
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At a time when data sales are responsible for large portions of telcos’ profit, MTN, Airtel, Glo and other telecom operators are willing to do anything possible to consolidate their broadband infrastructure. But if only one telco keeps getting the license for that because the price is too much, then that can’t be good enough for fair competition.
In other news, listed companies are aligning themselves with the new CAMA
Ahead of the December 31st deadline for compliance with the new Companies and Allied Matter Act (CAMA), some Nigerian companies have announced their next steps. One such company is Vitafoam Nigeria Plc which announced last week that its shareholders endorsed a proposal to cancel 1,149, 155,936 unissued ordinary shares of 50 kobos each.
Note that Section 124 of the new CAMA stipulates that starting from the aforementioned deadline, all companies operating in Nigeria should have only issued shares as against the current system of operating issued and authorized share capital.
Still on this matter, Nigerian Breweries Plc said it will ask its shareholders to approve a proposed bonus scheme that was designed to eliminate the company’s unissued shares.
A corporate disclosure seen by Nairametrics said the shareholders will be presented with the recommendation during an Extra-Ordinary General Meeting (EGM) scheduled to hold sometime in December.
Hope for Omatek Ventures…
Speaking of unissued shares, the shareholders of Omatek Ventures Plc approved plans by the company’s Board to start allotting the company’s unissued 4,058,210,528 ordinary shares by way of a rights issue, public offer, private placement, etc.
The agreed shareholders that allotting the unissued shares would help the struggling company to raise money and strengthen the company’s capital base.
Dangote Group’s multi-billion earnings…
An analysis by Nairametrics showed that three Dangote companies raked in a combined revenue of N1.51 trillion in the first nine months of 2022. The companies are Dangote Cement, Dangote Sugar, and Nascon Allied Industries.
The amount is more than the combined sum of N1.2 trillion generated by the three companies during the comparable period in 2021. However, despite the significant increase in revenue, high operating costs reduced the companies’ combined profits from N296 billion to about N240. 8 billion in the period under review.
Five insurers pay N94 billion worth of claims
Between January and September, five Nigerian insurance firms paid N94 billion worth of claims. The insurance firms are Custodian Insurance, NEM Insurance, AxaMansard, AIICO, and Coronation Insurance.
Analysts at Nairametrics said the higher claims payment was due to Nigeria’s worsening inflationary environment which caused the cost of goods and services to skyrocket. A high inflation rate increases the risk of higher operating costs for insurance companies when they honor their claims to their customers for life and non-life-based products.
Retail store company, SPAR, was barred last week by a magistrate court in Rivers State from proceeding with its planned Black Friday sales in the state capital Port Harcourt. Nairametrics gathered that the Rivers State Government filed the suit itself to obtain the interim court order against the company.
The court also ordered the company to refrain from obstructing state environmental health officials from gaining access and inspecting its facilities to determine safety standards. The implication of the court order is that pending the safety inspection, the company will not go ahead with its Black Friday sales which scheduled to commence on November 18 and last through November 27.
Ongoing job losses in Nigeria’s tech space
Last week, Nigerian crypto startup, Nestcoin, announced that it was laying off some of its employees due to circumstances beyond its control. The company’s co-founder of Nestcoin, Yele Bademosi, described the decision as challenging but said it was necessary to keep the business going.
Nairametrics reported that Nestcoin’s troubles are related to the collapse of the American crypto exchange FXT. Nestcoin had kept a significant proportion of its stablecoin investment on the FTX Exchange. Unfortunately, following FXT’s collapse, the chances of getting the assets back are uncertain.
Meanwhile, as the good boss that he is, at least so it seems, Yele Bademosi made efforts to use his platform to secure jobs for some of the staff he was forced to lay off.
He posted a tweet targeted at other tech companies that might have openings. As expected, the tweet gained quite a lot of traction. But it’s uncertain if the traction translated to action in the form of jobs for the sacked workers.
Another Nigerian tech company that has seen a mass exit of workers is Future Africa. Nairametrics gathered a combination of resignations and layoffs are unfolding at the company.
TechCabal, which reported the story, explained that the layoffs are happening ahead of Future Africa’s planned transition from VC to becoming a venture studio. The transition means the company would not be needing a large workforce.
Finally, some appointment news…
Central Securities Clearing System (CSCS) Plc announced the appointment of Mr Adeyinka Shonekan as Executive Director on its Board.
Adeyinka, who is currently the company’s Divisional Head of Sales and Business Development, joined the Board of Directors of CSCS Plc effective November 2022. His appointment is subject to relevant statutory/regulatory provisions.
The Board of International Breweries Plc announced the appointment of Mr Carlos Coutino as the new Managing Director and Mr David Tomlinson as the new Finance Director. The appointments will take effect on January 1st, 2023.
A corporate disclosure by the brewer, filed with the Nigerian Exchange, said Mr Coutino’s appointment follows the resignation of Mr Hugo Dias Rocha, the company’s former Managing Director.
Hope Payment Service Bank Ltd announced the appointment of Mrs Ogechi Chinwe Altraide as Managing Director & Chief Executive Officer. A statement by the company said Mrs Altraide’s appointment is subject to the approval of the Central Bank of Nigeria.
She brings to Hope PSB over two decades’ worth of professional experience in the Nigerian banking industry. She will provide valuable insight for the Board and the Management of the bank.
Charms Holding Company Plc also announced the appointment of Mrs Mayowa Olaniyan as the new Group Managing Director/Chief Executive Officer with effect from December 1, 2022.
A corporate disclosure by the company explained that the appointment follows the retirement of Mr Gavin Young as the Group Managing Director/Chief Executive Officer after 3 years of service.
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