16 May

Daily Watch – Skye Bank takes over Intercontinental Hotel, Vehicle imports evaporate in Q1

  • Only 350 new vehicles were imported by Nigerian auto firms in Q1 2017, a drop of about 90 percent over 3,500 recorded in the same period last year. According to the Managing Director of Toyota Nigeria, Kunle Ade-Ojo, the dramatic fall in car imports was due to a combination of a high duty on imported cars, a shortage of foreign exchange and the wider economic recession. He further said that total retail sale of new vehicles for Q1 2017 stood at 2,000 units compared to 5,500 units sold last year. Although he said the fall in vehicle imports was also witnessed last year, it was not as pronounced as the latest numbers. For instance, he recalled that the total vehicles imported into the country in 2016 dropped to 7,000 from 18,000 in 2015. According to him, the total retail market plunged about 42 percent from 32,000 units in 2015 to 18,000 in 2016. He, however, said more commercial vehicles were sold last year at 70 percent of total sales than passenger cars. He also said the total forecast for the year was between 8,000 and 10,000 vehicles.
  • Oil firm Oando says it is in talks to work with Italian energy company Eni to rehabilitate one of the country’s four refineries. Oil minister, Ibe Kachikwu, said last week Eni would build a new refinery with a capacity of 150,000 bpd, using its Agip subsidiary. The agreement with Eni also included a repair, operate and maintenance agreement for the Port Harcourt plant. Oando said in a public notice on Monday it was in talks to partner with Agip in rehabilitating the Port Harcourt plant, returning its capacity to the original design level of 210,000 bpd from just 30 percent of that now. Oando said talks were expected to lead to a final agreement by the end of July.
  • The Federal High Court in Lagos has ordered Skye Bank to take over Intercontinental Hotel over an alleged debt and appointed Kunle Ogunba SAN, as the hotel’s receiver-manager in order to preserve its assets. The 361-room hotel is located in the flagship Kofo Abayomi Street on Victoria Island, Lagos. Justice Babs Kuewumi ordered Skye Bank to take over and preserve the assets Milan Industries Limited (the defendant), particularly the hotel which is covered by a deed of legal mortgage, pending the hearing and determination of the plaintiff’s motion on notice. The court also made an interim order granting judicial protection to Ogunba, who was appointed by the bank as the receiver-manager of the hotel by virtue of a deed of appointment dated November 11, 2016. Skye Bank said it provided Milan Industries with facilities in the sum of $29.8 million and ₦3.8 billion for the construction of Intercontinental Hotel. It also raised an overdraft facility of ₦500 million “to urgently fund payments to contractors and importation of material required for completing the hotel project.” As security, the defendant executed a deed of legal mortgage in favour of the bank in which it charged it charged the 361-room five-star hotel. The case was adjourned to May 17.
  • The Punch reports that Etisalat Nigeria lost over 2.9 million subscribers in the last two business quarters. The newspaper said that as of September 2016, there were 22.5 million active subscribers on the network but the figure had dropped to 20.8 million by December, a loss of 1.7 million subscribers within three months. The drop, according to the paper, represents a loss of about ₦3.1 billion in potential revenue for Etisalat for the quarter, going by the industry’s average revenue of ₦1,830 per user, according to the quarterly subscriber operation data obtained from the NCC. Similarly, in the first quarter of this year, the telco lost 1.2 million subscribers. This is also estimated to cost the telecoms company potential revenue of about ₦3.8 billion. Fact checks showed that between September last year and end of March, this year, Globacom increased its subscribers from 36.9 million to 37.3 million; Airtel grew from 34.1 million to 34.6 million but MTN dropped in subscriptions from 60.5 million to 60.3 million. Etisalat’s poor investment in its network occasioned by a $1.2 billion debt owed to eight Nigerian banks, some analysts say, was adversely affecting the company’s ability to deliver quality service and impeding its expansion.
  • The FMDQ OTC Securities Exchange Board’s Listings, Markets and Technology Committee has approved the registration of the Stanbic IBTC Holdings’ ₦20 billion Commercial Paper Programme on its platform. Issues from this programme are to be quoted on the OTC Exchange. FMDQ said given the increasingly competitive market environment, corporates and commercial entities had continued to seek innovative approaches towards executing their financing strategies. It said commercial papers continue to present and serve as an alternative source of complementing working capital requirements, among others, for companies.