Zenith Bank’s Hybrid Capital Raise: A Strategic Move to Meet Recapitalization Requirements

Zenith Bank Plc has announced plans to raise N290 billion through a combination of a Rights Issue and a Public Offer, a move aimed at meeting the revised minimum capital requirements set by the Central Bank of Nigeria (CBN). This capital raise is poised to benefit both existing and new shareholders by offering them opportunities to invest in the bank at favorable terms.

The Rights Issue offers 5,232,748,964 ordinary shares at N36.00 per share, while the Public Offer provides 2,767,251,036 ordinary shares at N36.50 per share. Existing shareholders can purchase additional shares on a one-for-six basis, while the public offer is open to new investors. This hybrid approach is designed not only to meet the CBN’s capital requirements but also to provide additional working capital to support Zenith Bank’s expanding operations and investments in technology infrastructure.

Zenith Bank currently has an issued and fully paid share capital of N15.698 billion and a share premium of N255.047 billion. With the new capital raise, the bank aims to add N229.225 billion to its capital base, which will exceed the CBN’s requirement and further strengthen its financial position.

The pricing of the Rights Issue and Public Offer is competitive, with the Rights Issue priced at N36.00 per share—aligned with the current market price—and the Public Offer at N36.50 per share, slightly higher than the market price but below the year’s average price. The stock is currently trading at a price-to-earnings (P/E) ratio of 1.30x, which is lower than the banking sector average of 2.2x, suggesting that Zenith Bank may be undervalued compared to its peers. Its price-to-book (P/B) ratio of 0.4 and price-to-sales (P/S) ratio of 0.44 further indicate that the bank’s shares are trading at a discount.

Speaking on the hybrid offer, Dame (Dr.) Adaora Umeoji, Group Managing Director/CEO of Zenith Bank Plc, expressed optimism about the capital raise, highlighting the strong response from existing shareholders and the strategic importance of including a public offer to attract new investors. She emphasized that the proceeds would be used to expand the bank’s operations across Africa and internationally, invest in technology, and support ongoing working capital needs.

Zenith Bank has a strong track record of financial performance, consistently ranking as one of Africa’s leading financial institutions. In 2023, the bank reported a pre-tax profit of N795.962 billion, making it the most profitable listed bank on the Nigerian Exchange (NGX). The bank’s performance in the first quarter of 2024 suggests that it is on track to exceed its 2023 results, with gross earnings and profit before tax both showing significant year-on-year growth.

For investors, the hybrid offer presents an opportunity to acquire shares in a bank with a proven history of profitability and strong growth potential. The attractive valuation metrics and the bank’s leadership in dividend payouts make Zenith Bank a compelling investment option.

Zenith Bank’s hybrid offer reflects its commitment to maintaining its leadership position in Nigeria’s banking sector and ensuring long-term value creation for its shareholders.

Ethiopian Airlines Deemed Incompetent to Bid for Nigeria Air: High Court Ruling

The Federal High Court in Lagos has ruled that Ethiopian Airlines was not competent to bid for Nigeria Air, the proposed national carrier project of Nigeria. The court also ordered the payment of N2 billion in damages to the Airline Operators of Nigeria (AON) and other plaintiffs for the harm they suffered due to their wrongful exclusion from the bidding process.

In a judgment delivered by Justice A. Lewis-Allagoa, the court stated that Ethiopian Airlines did not meet the necessary conditions under the Companies and Allied Matters Act (CAMA) 2020 and the Security and Exchange Commission Nigeria Consolidated Rules and Regulations 2013 (as amended in 2022). The court found that the sale of the planned airline to Ethiopian Airlines violated several Nigerian laws, including the Nigerian Investment Promotion Commission (NIPC) Act, the International Civil Aviation Organisation (ICAO) convention, the Civil Aviation Act, and the Public Procurement Act, among others.

The plaintiffs in the case included the registered trustees of AON, Azman Air Service Limited, Air Peace Limited, Max Air Limited, United Nigeria Airlines Company, and Top Brass Aviation Limited, while the defendants were Nigeria Air Limited, Ethiopian Airlines, former Minister of Aviation Sen. Hadi Sirika, and the Attorney General of the Federation.

The court ruled that Ethiopian Airlines and its consortium had not met the pre-qualification requirements necessary to bid for shares in the Nigeria Air project. A perpetual injunction was issued, preventing the defendants from continuing or transferring the operations of Nigeria Air to Ethiopian Airlines.

Furthermore, the court declared the issuance of an Air Transport License (ATL) by the Nigeria Civil Aviation Authority (NCAA) as null and void. The judge emphasized that the bidding process was in violation of the Infrastructure Concession Regulatory Commission (ICRC) Act, which requires the process to be advertised in at least three national newspapers—a requirement that was not met.

This ruling underscores the importance of adherence to proper legal and regulatory frameworks in public-private partnership projects in Nigeria.

Developing a Robust Local Air Cargo System for Agro Products in Nigeria

Transporters of food and agricultural products in Nigeria face significant challenges in getting their goods from farms to markets. The primary obstacles include poor road conditions, multiple taxes, harassment, insecurity, and robbery, all of which contribute to the country’s growing food crisis. As a result, there is a pressing need to develop more viable options for transporting food items to consumers in their freshest and most nutritious states.

Alhaji Adio Aregbe, an interstate transporter, emphasized the importance of government intervention in improving transportation infrastructure. He suggested that an efficient rail system could lower the cost of transporting farm produce and enhance food security. However, he also advocated for the development of local air cargo services, particularly in states that have invested in cargo airports.

Currently, over 16 airports in Nigeria are designated as perishable export terminals by the Federal Airports Authority of Nigeria (FAAN), with only a few—Lagos, Port Harcourt, Kano, Abuja, and Owerri—operating at optimal capacity. Despite the underperformance of existing cargo airports in contributing to Nigeria’s GDP and economy, state governments continue to invest heavily in them, often at the expense of other critical infrastructure and social amenities.

Aregbe highlighted the need for state governments to ensure that these cargo airports are equipped with safe and functional road linkages, as well as light cargo planes dedicated to transporting agricultural products and other perishable goods.

Captain Aret Adeola, a co-pilot with a national airline and graduate of the Nigeria School of Aviation Studies, explained the importance of air cargo for transporting perishable goods. He noted that air freight is ideal for perishable items due to its speed and efficiency, allowing for faster delivery times and reduced transit periods. Insulated containers, such as coolers or temperature-controlled packaging, can help maintain the desired temperature throughout the journey, ensuring that perishable goods like fruits, flowers, and vegetables arrive in optimal condition.

Mr. Henry Ifinwa of Townsend Travels added that the air cargo industry not only provides efficient transportation for goods but also generates jobs and revenue for supporting industries such as aircraft manufacturing, logistics, and warehousing. He pointed out that air freight services offer numerous advantages, including global reach and reliable delivery times, while also reducing the need for warehousing due to quicker clearance procedures.

Despite these benefits, the aviation industry faces challenges, particularly in Nigeria, where much of the focus has been on passenger transport, aircraft movement, and security issues. Mr. Aloba Yusuf, a member of the National Association of Government Approved Freight Forwarders (NAGAFF), emphasized that for Nigeria’s air cargo sector to thrive, airports must have clear objectives and comprehensive marketing and business development plans.

Aloba noted that many airports assume they can serve the air cargo segment effectively simply because they have a runway. However, success in air cargo operations depends on various factors, including the physical capacity of the airport, regional market demand, and the availability of infrastructure and services.

He further explained that air cargo accounts for 35% of global trade, with over $6 trillion worth of cargo transported annually. In Nigeria, where agricultural produce has ready markets both locally and internationally, there is significant potential for growth in the air cargo sector. However, this will require strategic planning, investment in infrastructure, and a focus on reducing costs and improving efficiency.

As Nigeria continues to develop its air cargo capabilities, it will be essential to address the challenges that have hindered the sector’s growth, including the need for better infrastructure, more efficient logistics systems, and greater coordination among stakeholders. By doing so, the country can unlock the full potential of its agricultural sector and ensure that food products reach consumers in the best possible condition.

Mangal Cement’s Entry Poised to Shake Up Nigeria’s Cement Market

The Nigerian cement industry is on the brink of a significant transformation with the introduction of Dahiru Mangal’s Cement Plant in Moba, Kogi State. Valued at $1.5 billion, the plant’s capacity to produce 200 trucks of cement daily could dramatically alter the market by increasing supply and potentially driving down prices.

The plant is expected to create 10,000 direct jobs and hundreds of thousands of indirect jobs, enhancing the local economy. Its advanced technology and focus on sustainability mark a shift in the industry, positioning Mangal as a serious competitor to established giants like Aliko Dangote and Abdul Samad Rabiu.

Industry watchers predict that Mangal’s entry could disrupt the current market dynamics, possibly leading to price adjustments. Builder Matthew Ighomor noted, “Mangal’s investment signals a new era. His plant’s capacity could alleviate supply shortages and influence pricing.”

Real estate developer Lawrence Megbon added, “If Mangal’s cement is affordable, it will be a game-changer for our construction projects.”

The arrival of Mangal Cement has already sparked excitement among consumers, particularly as reports indicate that Nigerians are flocking to purchase Mangal Cement at ₦6,000 per 50 kg bag. This is a significant relief compared to the prices of Dangote Cement (₦7,500-₦7,800 per bag), Lafarge Cement (₦7,400-₦7,600 per bag), and BUA Cement (₦7,500-₦7,700 per bag).

As Mangal Cement begins operations, its impact on supply and demand will be closely watched. The increased competition could force existing cement brands to lower their prices, benefiting consumers. Building materials merchant Gab Olude commented, “Mangal’s emergence pits him against industry leaders like Aliko Dangote and Abdul Samad Rabiu. These giants must now recalibrate their strategies to maintain their dominance.”

While some industry experts view Mangal Cement’s entry as a positive development, citing potential improvements in pricing and product quality, others express concerns. Economist Fred Uweru warned that Mangal’s aggressive pricing strategy could lead to a race to the bottom, where quality is compromised as companies strive to cut costs.

Moreover, Uweru cautioned that Mangal’s entry could disrupt supply stability. New entrants often face challenges in production capacity and distribution logistics, which could lead to fluctuations in availability. Such instability might affect ongoing and future construction projects, ultimately impacting economic growth.

Mangal Cement’s presence in Nigeria is likely to provoke a complex set of challenges that could reshape price dynamics, product quality, and supply availability in the cement sector.

Tragic Helicopter Crash in Australia: Pilot Killed, Hotel Evacuated

A helicopter on an unauthorized flight crashed into the roof of a hotel in Cairns, a popular tourist destination in northern Australia, early Monday morning, resulting in the death of the pilot and the evacuation of hundreds of hotel guests.

According to Reuters, emergency crews responded around 2 a.m. local time (1600 GMT on Sunday) after the twin-engine helicopter struck the hotel, igniting a fire and prompting immediate evacuations, as reported by Queensland state police.

Authorities have confirmed that the helicopter was taken from its hangar without authorization. The pilot, whose identity has not been released, was pronounced dead at the scene.

The crash occurred at the DoubleTree by Hilton Hotel in Cairns, a city known as a gateway to the Great Barrier Reef, according to Australian media.

Two hotel guests, an elderly man in his 80s and a woman in her 70s, were treated at a hospital and later released. State broadcaster ABC reported that two rotor blades from the helicopter detached, with one landing in the hotel pool.

The forensic crash unit will collaborate with Australia’s transport safety regulator to compile an accident report, police stated.

Nautilus Aviation, the owner of the helicopter, has announced its full cooperation with the ongoing investigation.

Lagos Shines on Global Stage at Paris 2024 Olympics

Lagos State made a significant impact at the Paris 2024 Olympics, hosting the Lagos Paris Olympics 2024 Esports and Sports Economy Roundtable. The event, organized by the Lagos State Sports Commission, took place at the Africa Station Doom, L’lle-Saint-Denis, in Paris, France.

Under the theme “Exploring New Frontiers and Business Opportunities in Sports,” the roundtable highlighted the forward-thinking approach of Lagos State, led by Governor Babajide Sanwo-Olu. The Director General of the Lagos State Sports Commission, Lekan Fatodu, emphasized the state’s commitment to sports development and its vision of establishing Lagos as a global leader in sports innovation and collaboration.

Fatodu noted, “As the Paris Olympics capture global attention, Lagos has effectively used this international platform to showcase its sporting ambitions. The roundtable has not only raised Lagos’ global profile but has also opened new avenues for economic growth through sports.”

The event focused on various aspects of sports development, particularly the burgeoning field of esports. It brought together high-ranking government officials, potential investors, and representatives from international sports organizations to discuss the future of sports in Lagos.

Prominent figures such as Désiré Koussawo, President of France Esports; Lekan Ajisafe, philanthropist and sports enthusiast; Hon. Abiodun Orekoya, Chairman of the Lagos State House of Assembly Committee on Sports; and Mobolaji Ogunlende, Lagos State Commissioner for Youth and Social Development, were among the panellists. They explored opportunities within the sports value chain and how Lagos can leverage its prominence to attract investments and develop its sports industry.

Other experts, including Lanre Alfred, CEO of Old English; Damilare Orimoloye, Senior Special Assistant to the Governor on Sports; Deji Omotoyinbo, veteran sports broadcaster; Tella Abiodun, CEO of G2P Sports Limited; Dr. Kweku Tandoh, President of the Nigerian Badminton Federation; and Frank Orbih, shared insights on advancing the esports business in Nigeria.

The roundtable event has positioned Lagos as a key player in the global sports conversation, with the world now watching to see how the city will capitalize on the momentum gained from this prestigious platform.

UNIBEN Bans Use of Hot Plates and Gas Cookers in Hostels to Cut Costs

The University of Benin (UNIBEN) has announced a ban on the use of hot plates, ring boilers, and gas cookers in its hostels in an effort to reduce rising energy costs. This directive was issued in a circular signed by the university’s Registrar, Ademola Bobola.

According to the circular, students who violate the new policy will face rustication from the institution. The decision comes in response to the recent electricity crisis at the university, which saw the Benin Electricity Distribution Company (BEDC) raise the university’s monthly electricity bill from N88 million to N250 million. This significant increase led to the disconnection of electricity to both of UNIBEN’s campuses and sparked student protests in early July following prolonged power outages.

As the university prepares to reopen on Monday, the administration has emphasized the importance of adhering to new guidelines regarding electricity usage. Students are also required to pay any outstanding fees, with proof of payment needed to gain access to exam halls.

Additionally, the registrar urged students to maintain good conduct, refrain from participating in unauthorized assemblies or demonstrations, and adhere strictly to university rules and regulations.

The university’s new policies aim to ensure a stable and sustainable electricity supply on campus while maintaining order and compliance among students.

Lagos Blue Line Increases Daily Trips to 72, Offers Off-Peak Fare Discountsj

The Lagos Rail Mass Transit Blue Line is set to increase its daily trips from 54 to 72 starting today, according to a statement released by Abimbola Akinajo, Managing Director of the Lagos Metropolitan Area Transport Authority (LAMATA). The announcement was made on the agency’s X (formerly Twitter) handle on Sunday.

With the new schedule, commuters will experience a faster travel time of 18 minutes between Marina and Mile 2, down from the previous 25 minutes. Trains will now run every 18 minutes in both directions, allowing passengers to better plan their journeys.

Additionally, LAMATA introduced a 25 percent fare discount for commuters traveling during off-peak hours, specifically between 10 am and 4 pm daily. This initiative aims to reduce journey times, encourage greater usage of the train system during less busy periods, and lower transportation costs.

The Blue Line, which began passenger operations on September 4, 2023, has already transported nearly two million passengers. Updated timetables are available on the LAMATA website, at stations, and on their social media platforms.

“APC Moves to Reinstate Ali Ndume as Senate Chief Whip Following Apology”

The ruling All Progressives Congress (APC) has initiated discussions with the Senate leadership to potentially reinstate Senator Ali Ndume as the Senate Chief Whip. This comes a month after Ndume, who represents the Borno South Senatorial District, was removed from the position following his public criticisms of President Bola Tinubu and the APC.

Ndume had claimed that President Tinubu was isolated from the realities faced by Nigerians, a statement that drew the ire of the ruling party. Consequently, he was replaced by Senator Tahir Monguno, representing Borno North, through a directive from the APC National Chairman, Abdullahi Ganduje, and National Secretary, Senator Basiru Ajibola.

After a recent two-hour meeting with the APC National Working Committee in Abuja, Ndume issued an unreserved apology, which the party has accepted. APC National Chairman Ganduje described the situation as a “family affair” and confirmed that the party is now working to communicate the reconciliation to the National Assembly.

According to sources within the APC, the party has begun consulting with Senate leadership to consider reinstating Ndume to his former position. The Deputy National Organising Secretary of the APC, Nze Chidi Duru, confirmed these consultations, stating that while they may not be public, they are essential for resolving the matter within the party.

Bala Ibrahim, the APC’s National Publicity Director, explained that the reinstatement is part of routine political adjustments, likening it to a cabinet reshuffle in the executive branch. He emphasized that such decisions are at the discretion of the Senate leadership and the party.

The APC’s leadership believes that Ndume’s experience and seniority make him a strong candidate for reinstatement, and they are working to ensure that any necessary consultations are conducted to maintain a harmonious process.

“Ibom Air Dismisses Allegations of Ticket Racketeering at Port Harcourt Station”

Akwa-Ibom State-owned airline, Ibom Air, has firmly denied allegations of ticket racketeering at its Port Harcourt station, describing the claims as unfounded and baseless.

In a statement released by the airline’s General Manager of Marketing and Communication, Aniekan Essienette, on Monday in Uyo, the state capital, Ibom Air emphasized its commitment to strict ethical standards. The airline assured that its staff are prohibited from engaging in any form of racketeering or corruption, and any attempts to undermine these standards are investigated and appropriately sanctioned.

Essienette clarified that Ibom Air’s check-in process for domestic flights closes 45 minutes before departure, in accordance with IATA guidelines, and that the airline strictly adheres to these procedures, including handling ‘Go-show’ passengers—those who arrive without a pre-booked ticket.

The statement read, “Ibom Air has become aware of recent allegations concerning our handling of flight check-ins and ticketing procedures and unfounded accusations of ticket racketeering at our Port Harcourt station.

“We categorically reject these baseless claims. Our staff operate with the highest level of integrity and are committed to serving our customers fairly and transparently. This commitment is at the core of our operations, and we will continue to ensure that our ticketing process remains transparent.”

Essienette reiterated that the airline adheres to international standards to ensure timely departures and minimize delays, urging passengers to arrive on time for a smooth travel experience.

“We value your trust in Ibom Air and are unwavering in our commitment to maintaining the highest service standards. We will continue to act in the best interest of passengers while upholding operational excellence in our industry,” the statement concluded.