News Update


Friday 27 July, 2018

Oando: London Arbitration Court Orders Tinubu’s Firms to Pay Volpi $680m

Friday 20 July, 2018

There appears to be no end in sight in the tussle between Oando Plc and Ansbury Investments Incorporated as the London Court of International Arbitration (LCIA) has issued an award against two companies owned by the Chief Executive Officer of Oando Plc, Mr. Wale Tinubu, and his deputy, Mr. Mofe Boyo, to pay a total debt of US$680 million (N244.8 billion) to Ansbury Investments, owned by Mr. Gabriele Volpi.

In its ruling on July 6, 2018, the LCIA held that Ocean and Oil Development Partners (OODP), British Virgin Islands, which owns 55.96 per cent of Oando Plc through a holding company named Ocean and Oil Development Partners (OODP) Nigeria Limited, is indebted to Ansbury Investments Incorporated to the tune of US$600 million (equivalent of N216 billion).

An international lawyer and counsel to Ansbury Investment, Mr. Andrea Moja, confirmed the LCIA award in a statement yesterday. According to Moja, the Arbitration Court also held that a company known as Whitmore Asset Management Limited, whose ultimate beneficial owners are Tinubu and Boyo, were also indebted to Ansbury Investment to the tune of another US$80 million (N28.8 billion).

This made the total debt owed by the Oando chief executives to Ansbury Investment US$680 million.

Documents obtained from the LCIA, which is reputed to be one of the world’s leading international institutions for commercial dispute resolution, identified the family of Volpi, a Nigerian-Italian, as the ultimate beneficial owner of Ansbury, while Tinubu and Boyo were identified as the ultimate beneficial owners of Whitmore Assets Management Limited. The London Arbitration Court held that an existing “Third Shareholders Agreement” between the parties is fully and legally binding on the parties as claimed by Ansbury Investment.

The documents indicated that a Final Award in which the court would pronounce on accrued interests on the debts owed and legal expenses incurred by Ansbury would follow in the next few days. The LCIA award was communicated to the parties concerned on July 9, 2018. The statement added, “The award has been communicated to the parties on July 9th, 2018 and the key terms are as follows:

“The claim of Whitmore Asset Management Limited that the parties agreed to a binding Fourth Shareholders Agreement was rejected. The court upheld the position that the third shareholders’ agreement is fully and legally binding between the parties as stated by Ansbury Investments Inc.

“The alleged agreement by which Whitmore Asset Management Limited was to hold 60% of Ocean and Oil Development Partners (BVI) Ltd is not binding on the parties.

“Ocean and Oil Development Partners (Bvi) Ltd owes a debt to Ansbury Investments Inc for an amount of US$ 600 million.

“Whitmore Asset Management Limited owes a debt to Ansbury Investments Inc for an amount of US$ 80 million.

“This Partial Award will be followed by a Final Award in which the London Court of International Arbitration (LCIA) will pronounce on interests on the amounts owed and legal expenses.

“Given the above, Ansbury Investments Inc will immediately submit an application to London Court of International Arbitration (LCIA) in which it will be asked to charge Whitmore Asset Management Limited for all the due interests and legal expenses as well.”

In 2012, Ansbury reportedly invested about $700 million in Ocean and Oil Development Partners Limited (OODP BVI), a special purpose vehicle registered in the British Virgin Islands by acquiring a 61.9 per cent stake in the firm, while a company owned by Tinubu, Withmore Limited, held 38.10 per cent of the stake in OODP BVI.

Tinubu had approached Volpi to invest in the British Virgin Islands-registered firm when Oando Plc was seeking to acquire ConocoPhillips’ upstream oil and gas assets in Nigeria for $1.5 billion.

OODP BVI, in turn, owns 99.99 per cent of the shares of Ocean and Oil Development Partners Nigeria Limited (OODP Nigeria), which holds 55.96 per cent of the shares in Oando.

When the disagreement broke in 2017, Ansbury had also petitioned the Securities and Exchange Commission (SEC) in May over allegation of financial mismanagement, huge indebtedness as well as falsification of financial statement.

The petition then was titled “Serious Concern to Corporate Governance Existence, Gross Abuse of Corporate Governance and Financial Management in Oando Plc – Request for Urgent Regulatory Intervention.”

In the petition, Ansbury had also cited page eight of the company’s annual report of 2016, alleging that a “strong uncertainty regarding the going concern status of the group had already arisen in 2015 and strengthened in 2016 as clearly pointed out by the auditors in their report”.

The petitioners had also alleged that “operational management closed with a consistent loss of over N7.68 billion, significantly worse than 2015”, arguing further that “the net loss for the year from continuing operations in 2016 amounted to N25.8 billion, adding to the net loss of N34.9 billion of the previous year (2015)”.

In addition, Ansbury had also informed SEC that Oando’s “current liabilities as at December 31, 2016, far exceeds the current assets by N263.7 billion, confirming serious financial imbalance from the previous financial year”.

The petition had culminated in the suspension of Oando’s shares on the floors of the Nigerian Stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE) in October 2017. The suspension was however lifted on April 11, 2018.


Friday 20 July, 2018

Dangote to make history with Nigeria oil refinery, fertilizer IPO

Monday 9 July, 2018

The largest indigenous industrial conglomerate in Sub-Saharan Africa Dangote group has announced plans to have an Initial Public Offering (IPO) listing of both its fertilizer and refinery plant. The IPO is the first of its kind in Nigeria and if successful could set the stage for other companies to test the market.

The listing of the $2.5 billion fertilizer plant and $10 billion refinery capacity will be done differently as it will cut reliance on international markets for Africa’s largest oil producer, who imports more than 90 per cent of its fuel needs. The IPO is scheduled to commence after next year’s general election (early 2020).

Valuation of Refinery

BusinessDay estimates the potential market value of Dangote Refinery to be around $34.5 billion. This value was estimated using the average market valuation of some of the largest refiners in the world which are Exxon Mobil, British Petroleum, Shell, Petrochina, SINOPEC and Indian based Reliance based Industries Limited.

We estimated the market value of the refinery business as a standalone from the main entity by multiplying the percentage contribution of the refinery income to total revenue of the oil and gas companies with their total market capitalization. The average percentage contribution was 80.98 percent of total revenue.

We then estimated the average market value per barrel refined using the production capacity of the refinery and the estimated market capitalization of the refinery business. The average value per barrel refined was estimated to be $53,070 per barrel.

To obtain the market capitalization of Dangote Refinery we multiplied the production capacity of the refinery which is 650,000 barrels per day with the average market price per barrel refined which gave us an estimated market value of $34.5 billion.

Of the total firms used in the analysis, Dangote refinery had the smallest market value while the largest was Exxon Mobils refining operations which contributed 77.84 percent of revenues in 2017 with a daily refining capacity of up to 6.3 million barrels per day across multiple refineries around the world.

With 650,000 bpd Dangote refinery is one of the largest refineries in the world, behind the likes of Jamnagar refinery owned by Reliance Industries Limited which produces 1.2 million bpd.

Estimated Revenue

Nigeria a country of almost about 200 million people currently consumes roughly 35 million litres of petrol daily; Dangote’s Refinery facility is expected to produce about 50 million litres a day of petrol which implies the refinery will have about 15 million litters for export.

Dangote Refinery is expected to generate revenue of about N3.1 trillion from petrol in a full operating year which we arrived at by multiplying the expected production of 50 million litres a day of petrol by landing cost of petrol of N171 by 365 days.

Although, we also acknowledge that the landing cost of N171 might have increased due to higher oil prices and Dangote is expected to pump around 20,000 barrels a day from two shallow-water blocks, known as OML 71 and 72, located in the Niger River delta in south eastern Nigeria.

The refinery is also expected to produce about 15 million litres of diesel which will generate about N947 billion in a full operating year. We arrived at N947 billion by multiplying the 15 million litres by landing cost of diesel of N173 by 365 days. This means the Refinery could generate annual revenues of N4.04 trillion or $11 billion per annum.

Valuation of Fertilizer Plant

BusinessDay estimates the potential market value of Dangote Fertilizer plant to be estimated around $4.67 billion.
This value was estimated using the average market valuation US based Nutrien limited and Norway based Yara International who are among the largest fertilizer plants in the world and also generates 100 percent of their revenue from fertilizer.

We estimated the market value per output of the Fertilizer plant as a standalone from the business by multiplying the percentage contribution of the Fertilizer income to total revenue of the Fertilizer companies with their total market capitalization.

We then estimated the average value of per output in the fertilizer plants to be $1,556. To obtain the market capitalization of the Fertilizer plant, we multiplied the production capacity of the fertilizer plant which is 3 million metric tonnes per day with the average market price per fertilizer output which gave us an estimated market value of $4.67 billion.
“It will attract foreign investor’s attentions to Nigeria and also further place the country on the worlds stage as investors will be looking to tap into the huge opportunities in the oil and gas sector, which is an area government have failed over the years,” Ayodeji Ebo CEO at Afri-invest securities Limited said.
Currently being constructed on a 2, 200 hectares at the Lekki Free Trade zone in Lagos, with capacity to refine 650,000 barrels of crude per day, and a petrochemical plant of 750,000 metric tonnes of polypropylene per annum, it is 13 times bigger than the Indorama Eleme Petrochemicals Limited.

“The planned IPO will easy the issues of PMS, reduce importation of fuel and also reduce volatiles in terms of pricing,” Ebo told BusinessDay.

Projected to be the biggest refinery in Africa, it is also projected to have 1.5 times more capacity than the existing four oil refineries in the country, even if they are operating at 100 per cent while the 3 million metric tons a year capacity fertilizer plant located near the refinery will probably be producing its first batches of urea by the end of this year costing around $2.5 billion.

Ebo also noted that the planned IPO will be highly successful as Dangote is already a global brand and foreign investors will like to associates with the name.

Edwin Devakumar group executive director at Dangote Industries Ltd confirmed that the company has been in talks with oil traders including Royal Dutch Shell Plc, Vitol Group and Trafigura Group about supplying the refinery with crude and buying refined products.

BusinessDay contacted Shell a multinational oil firm working in Nigeria to confirm if they anticipating the Dangote refinery; “we can’t comment on speculated commercial talks with third parties,” a top official of Shell told BusinessDay by email.

The plant is designed to process light and medium grades of crude and produce fuels that meet European standards so that Dangote can sell them globally as Dangote is expected to start producing its own oil, partly to supply the refinery, within a few months. It aims to pump around 20,000 barrels a day from two shallow-water blocks, known as OML 71 and 72, located in the Niger River delta in south-eastern Nigeria.

“While Dangote took on a $3.3 billion syndicated loan, which Standard Chartered Plc arranged, most of the refinery and fertilizer projects are self-funded. Both units will probably be partly sold via initial public offerings eventually,” Devakumar said.

Dangote selected Engineers India Ltd. (ENGR) to do most of the detailed engineering work for the new plant. Construction contractors have yet to be appointed.

SEC: MTN Has Not Applied for Regulatory Review of Planned IPO

Monday 9 July, 2018

The Securities and Exchange Commission (SEC) on Sunday disclosed that it was unaware that telecommunications giant, MTN Nigeria Limited, has filed an application to it to review its plan to undertake an Initial Public Offering (IPO) in Nigeria’s capital market.

The SEC, in a statement sent to THISDAY in Abuja, explained that neither MTN Nigeria Limited nor any of its advisers or representatives has filed any application with it regarding the IPO.

It thus debunked media reports claiming it was holding back the telecommunications firm’s plan to undertake the IPO.

“The commission wishes to categorically state that the information contained in the said publication is false, misleading and without merit.

“Additionally, the commission would like to state that MTN Nigeria Limited to the best of the commission’s knowledge is a private company limited by shares, As at the date of this circular, neither MTN Nigeria Limited nor any of its advisers or representatives has filed any application with the SEC regarding the said IPO,” said the statement.

It added: “Given that there is no application from MTN before the commission, there could not have been a request by MTN or any of its representatives or advisers requiring any form of regulatory review.”

The SEC said it would welcome filings aimed at deepening and broadening Nigeria’s capital market and was ready to provide the necessary regulatory support to ensure such happened.

According to it, “If MTN finally files a formal and complete application with the commission, it would be treated with the usual diligence and urgency that is applicable to all such filings.”

“Furthermore, we wish to remind all capital market operators of their duty not to furnish information, which is false, and misleading in any material particular as the commission would not hesitate to take necessary regulatory actions on any erring market operator.

“The commission remains committed to its core mandate of investor protection and maintaining the integrity of the Nigerian capital market,” it added.

Last year, MTN group announced that its Nigerian business will be listed on the Nigerian Stock Exchange this year, by way of initial public offering (IPO). Significant progress has been recorded vis-a-vis the IPO, which is expected to be concluded next month. 

We establish a compelling investment case for MTNN, considering the company�s impressive track record which is supported by scaled market position and the first-mover advantage. Beyond that, it is difficult to ignore the telco�s new growth initiatives - to be implemented by a sound management team which could potentially propel earnings to new highs over the medium term.

Nigeria�s telecommunication industry � quick facts


  • Largest telecoms market in Africa
  • Four mobile telecom operators
  • 160.5 million mobile subscribers with teledensity and penetration rate at 114.7% and 75% respectively
  • MTN is the market leader (65.2 million subscribers at 40.7% market share)
  • 101.2 million data subscribers
  • Contributed 9.2% to overall GDP in Q1-18

At Theanalyst, our articles, materials and contents stem from critical research work and analysis which are of world class standard that require investment. Hence, we regard them as intellectual property which should not be trampled on. Please, do not cut & paste articles, rather share with the sharing tools provided below the articles. See our Terms & Conditions and Copyright Policy for more details or Email: to know more.

Latest Downloads

Individual Client Kyc (1) INDIVIDUAL CLIENT KYC
Corporate Client Kyc1 CORPORATE CLIENT KYC
Stock Transfer Form for verification
Individual Investor Policy Statement
Purchase Mandate