17 Apr

Daily Watch – New Lekki Port gets French operator, Konga & Yudala seal marriage

  • Fitch Ratings has noted that sub-Saharan African sovereign debt levels were stabilising following a sharp increase in the near past. The rating agency, however, warned that the growing use of the international capital markets may increase refinancing risk as the amount of foreign debt due for payment rises. Fitch, which stated this in its latest report on the continent obtained at the weekend, also pointed out that maturities appear manageable in the near term, but public financial management in the region remains weak. The report stated in part that “the rise in debt since 2011, growing use of commercial funding, and in some cases currency depreciation have increased debt servicing costs in some countries. Seven of the 18 Fitch-rated SSA sovereigns had general government interest payments/revenues above 15 percent last year, the highest since at least 2000.”
  • French shipping group CMA CGM Group and Lekki Port LFTZ Enterprise, the promoters of Lekki Deep Sea Port, have signed a Memorandum of Agreement to operate Lekki Port’s future container terminal. The future Lekki Deep Sea Port will be developed, built and operated by LPLE, a joint venture enterprise led by the Tolaram Group, the Lagos State Government and the Nigerian Ports Authority. Upon completion in 2020, Lekki Port will have two container berths, the container terminal will be equipped with a 1,200-meter-long quay as well as 13 quay cranes and will have a capacity of 2.5 million Twenty-foot Equivalent Units. With its 16 meter depth, it will allow the Group to deploy ships with a capacity of up to 14,000 TEUs. CMA CGM S.A. operates 200 shipping routes between 420 ports in 150 different countries.
  • Konga and Yudala have officially merged operations in a move which will see them effectively become Nigeria’s biggest retail and e-commerce operation. The business merger, effect 1 May, will see both companies operate under the Konga brand name, and market watchers have posited that the merger is positioned to further strengthen the country’s e-commerce sector, estimated to be worth $13 billion, with over 400,000 daily transactions according to the Guardian. The merger, signed on 15 April in Lagos, will see both companies leverage the combined strengths of both platforms and is expected to further broaden the scope of organised retail and e-commerce. Zinox Group, which owns Yudala, acquired a 100 percent stake in Konga in February.
  • Oando shareholders have called for the sack of finance minister, Kemi Adeosun for allegedly interfering with the stock market. In a statement by the Trusted Shareholders Association of Nigeria and the Proactive Shareholders Association, the stakeholders accused the minister of shielding the oil company from an SEC probe. They insist Adeosun was stalling a joint Nigerian-South African forensic audit, an action they say is detrimental to them as well as the Nigerian capital market. Last week, the NSE lifted a technical suspension on the company’s shares but suspended it after three hours of trading, leaving investors and shareholders confused but the suspension was lifted the following day, the NSE blaming the SEC for the development. Oando shares rose 9.4 percent on Monday to an eight-month high.
  • The NSE has fined African Alliance Insurance ₦46.1 million for breaking its rules on account submission. In the regulator’s X-Compliance Report updated on 12 April, it said the insurer filed its 2015 and 2016 audited and interim financial statements after the regulatory due date, stating that the Exchange applied sanctions in accordance with the Rules for Filing of Accounts and Treatment of Default Filing under its Rulebook. The huge fines, coupled with management expenses have affected the reserves of the company; it had ₦1.49 billion in management expenses and negative reserves amounting to -₦21.05 billion in 2016. With negative reserves, the company may not be able to meet most of its responsibilities especially prompt claims payment. The NSE described the company as a “delinquent” filer of audited accounts as it fell short of the minimum listing standards in terms of timely disclosure of its audited annual financial performance and has Missed Regulatory Fillings or Awaiting Regulatory Approval with its primary regulator, NAICOM.