23 Mar

Daily Watch – Senate clears Cenbank logjam, Teleology deposits $50 million for 9mobile

  • Nigeria’s upper house approved the appointment of two deputy central bank governors and three MPC members on Thursday, giving the rate-setting panel sufficient numbers to meet for the first time this year. The Senate had held up some of President Buhari’s nominations in a dispute that had left the MPC unable to form a quorum of six. The next MPC meeting is scheduled for 3-4 April. Unable to establish a quorum, the bank cancelled its first MPC meeting in January and left interest rates on hold at 14 percent, a level it has kept for over a year to support the naira and curb inflation. Senate leader Bukola Saraki said Aisha Ahmad and Edward Lametek Adamu had been confirmed as CBN deputy governors, while Festus Adenikinju, Aliyu Rafindadi Sanusi and Robert Chinwendu Asogwa had been appointed to the MPC.
  • Nigeria raised ₦64.06 billion ($210 million) at Wednesday’s auction of government bonds, less than it originally planned but at lower yields, traders said. The FG has been working to cut its borrowing costs, particularly as inflation slows. It sold Eurobonds last month to help repay some treasury bills rather than rolling them over as it has done in the past. The DMO initially aimed to raise ₦70 billion. However, it sold ₦10.05 billion in five-year bonds at 13.40 percent and ₦45.10 billion in 10-year debt at 13.60 percent. It introduced a new seven-year paper at 13.53 to raise ₦8.91 billion. It drew subscriptions of ₦142.81 billion, more than half skewed towards the 10-year bond. Investors bid as high as 14 percent for the bonds at the auction.
  • Some excess Nigerian cargoes are likely to sail to India after state refiner IOC awarded its latest tender to buy oil. Spot offers were still concentrated on April-loading cargoes, traders said, with few offers surfacing for the May programmes. Roughly 20 cargoes remained available to trade from the April programme, including Qua Iboe, Erha and others. ExxonMobil had lowered its offer for Qua Iboe to dated Brent plus $1.40 a barrel, down from the most recent offer of $1.60 premium and well below initial offers closer to premiums of $2 per barrel. Qua Iboe and Agbami had traded more quickly than other grades, and the May programme for Qua was limited by maintenance. India’s IOC purchased at least 3 million barrels of West African crude from Total and Chevron in its tender for May-loading. Traders said the Indian refinery would take Nigeria’s Agbami and Escravos as part of the purchase, but neither confirmation of the grades nor further information on other grades were available.
  • Teleology Holdings has agreed to buy 9mobile, the investment firm said on Thursday. 9mobile, formerly Etisalat Nigeria, took out a $1.2 billion syndicated loan from 13 local banks in 2013 but failed to make repayments last year. Under the stewardship of its lenders, it has changed its board, management and name and is now up for sale. Teleology said it had made a $50 million deposit to meet conditions for the acquisition and had partnered with East Africa’s largest telecoms operator Safaricom to transform debt-laden 9mobile. Barclays Africa picked Teleology as the preferred bidder for debt-laden 9mobile last month and asked the company to pay a non-refundable deposit of $50 million by March. Teleology said it transferred the deposit to the trustee holding 9mobile shares on behalf of the lenders. Since the debt issue, 9mobile has lost subscribers. In October it had 17.1 million users, a 12.2 percent market share, which was down from 20 million subscribers, the NCC said.
  • Dangote Cement plans to sell ₦300 billion ($833 million) in bonds for expansion, according to Bloomberg. The debt will be issued in tranches over the next three years, says CFO Brian Egan, who added that the company is also considering a Eurobond sale to improve funding. According to the report, Dangote Cement said during an investors’ conference call it has received approval from Nigerian regulators to issue the local currency bond as it seeks to fund expansion and refinance debt. Dangote Cement plans to spend $350 million on capital projects in 2018, including the building export facilities at Nigeria’s seaports which will see it begin shipments of clinker and cement to neighbouring West African countries.
  • Ecobank released its financial statements for the year ended December 2017 which showed gross earnings in naira increasing from ₦665 billion in 2016 to ₦763 billion in 2017. The bank made a profit before tax of ₦88.3 billion in 2017 against a loss before tax of ₦33.7 billion in 2016. Profit after tax was also positive at ₦69 billion against a loss after tax of ₦52.6 billion. Operating profit before impairment losses was up by 14 percent to ₦214.3 billion, loans and advances to customers increased marginally by one percent to ₦2.86 trillion, while deposits from customers were up 13 percent to ₦4.65 trillion. Total group equity appreciated by 24 percent to ₦664.7 billion, total assets increased by 10 percent to ₦6.864 trillion, while its total liabilities also rose by eight percent to ₦6.16 trillion.