21 Jun

Daily Watch – Diaspora bond issuance a success, Etisalat UAE pulls out of Nigeria

  • Sahel Capital, manager of the Fund for Agricultural Finance in Nigeria, has announced the successful closure of a $66 million debut funding process which includes the African Development Bank, CDC Group, and the Dutch Good Growth Fund, jointly committing $31 million to FAFIN and joining other existing co-sponsors of the fund to drive Nigeria’s agricultural growth. The funds will be invested over the next two years. “The successful final close of FAFIN is a testament to the confidence our investors have in the scaling up and sustainability of the fund that was conceived in 2013. We also look forward to partnering with our incoming investors to driving catalytic growth in the sector through our partnerships with strong agribusinesses,” Mezuo Nwuneli, managing partner, Sahel Capital said. With the additional capital raised, Sahel Capital aims to invest in 9 to 10 additional companies which would create over 4,000 more direct and indirect jobs, and further uplift the lives of over 36,000 smallholder farmer families across Nigeria.
  • Nigeria has issued its first diaspora bond in the international capital market, raising $300 million at coupon rate of 5.625 percent for a tenor of five years. The DG of the DMO, Abraham Nwankwo, explained that the diaspora bond, which was 130 percent subscribed, was targeted principally at Nigerians abroad. The bond was structured as a retail instrument to appeal to a wide range of investors and was offered through private banks and wealth managers, rather than institutional investors, which normally deal in large volume transactions. With the successful issuance of the debut Diaspora Bond, Nigeria will establish a programme for raising funds from Nigerians and Friends of Nigeria in Diaspora, as an avenue for continuous participation in the development of the economy.
  • Etisalat Nigeria has confirmed changes in its shareholdings structure. Yesterday, its Abu Dhabi parent company, Mubadala, owners of Etisalat UAE, informed the Abu Dhabi stock exchange that it was divesting completely from Nigeria. Moves to change the shareholding structure have begun. Before the pull out of Etisalat UAE, a consortium of banks, led by Access Bank, had taken over the management of Etisalat Nigeria, effective June 15. The takeover followed the collapse of the effort by Emerging Markets Telecommunications Services to reach agreement with the banks on debt restructuring plan in the protracted $1.72 billion (about ₦541.8 billion) debt impasse. However, EMTS Holding BV, established in the Netherlands, has up to June 23 to complete the transfer of 100 percent of the company’s shares in Etisalat to the United Capital Trustees, the legal representative of the consortium of banks.
  • The total assets of Nigerian pension funds grew by 3 percent between March and April 2017 to a record ₦6.5 trillion, according to information released by PenCom and analyzed by Quantitative Financial Analytics. The asset class that benefited most from the surge is foreign money market securities which grew by 336%, from ₦5,188 as at February 2017 to ₦22,645 while investments in Commercial Papers grew by 165% from ₦16.763 to ₦44.503 within the period under review. On the flip side, Agency Bonds, comprising NMRC and FMBN bonds suffered the greatest divestment as pension fund asset allocation to that asset type fell by 50.13% to ₦41,113 from its February ending value of ₦82,441. Pension assets had stood at ₦6.3 trillion by the end of February, meaning that there has been a surge of ₦194.5 billion.
  • Shell is considering whether to invest in a gas project in the Niger Delta. SPDC managing director, Osagie Okunbor, said the company was “on the verge of making a final investment decision” on a project in the city of Asa that would have a capacity of 300 million cubic feet. He however declined to specify the sum of money being considered as a possible investment. Okunbor said Shell was putting more emphasis on gas and reducing the oil portion of its footprint in Nigeria, although he added that the company was “still a significant player in onshore (oil)”. Nigeria has the world’s ninth largest proven gas reserves, at 187 trillion cubic feet.