Re­tail in­vest­ment rises as Sahcol floats N1.9b shares

•Eleme Petro­chem­i­cal of­fer to hit stock mar­ket by March, 2019

The Guardian (Nigeria) - - THEGUARDIAN BUSINESS - By He­len Oji

PLANS to make or­di­nary Nige­ri­ans part-own­ers of some pri­va­tised state-owned en­ter­prises be­came a re­al­ity yes­ter­day, as Sky­way Avi­a­tion Han­dling Com­pany Lim­ited (SAHCOL), a mem­ber of the Si­fax Group, plans to float about N1.9 bil­lion worth shares on the Nige­rian Stock Ex­change (NSE).

The long-awaited ex­er­cise is the first in the cap­i­tal mar­ket af­ter four years of down­turn, in a trans­ac­tion per­ceived to be a grad­ual resur­gence of Ini­tial Pub­lic Of­fer­ing (IPO) in the na­tion’s cap­i­tal mar­ket.

SAHCOL, which was pri­va­tised in 2009, and ac­quired by Si­fax Group, would be rais­ing the fund by way of Of­fer for Sale of 406,074, 000 or­di­nary shares of 50 kobo each at N4.65 per share.

The of­fer has been sched­uled to open Novem­ber 12, 2018, to close De­cem­ber 19th, 2018, to en­able the cur­rent share­hold­ers di­vest part of their stake in the com­pany.

At the of­fi­cial sign­ing cer­e­mony held in La­gos yes­ter­day, the Di­rec­tor-gen­eral, Bureau of Pub­lic En­ter­prises (BPE), Dr. Alex Okoh, de­scribed the of­fer as a ma­jor mile­stone, as there has not been any ma­jor of­fer­ing in the mar­ket in the past four years.

Ac­cord­ing to him, the Fed­eral Gov­ern­ment is ready to exit busi­nesses and open up chan­nels for re­tail in­vestors’ own­er­ship, hav­ing de-risked some of these en­ter­prises.

Okoh re­stated gov­ern­ment’s com­mit­ment to more pub­lic share of­fer­ings for other pri- va­tised state-owned en­ter­prises and sub­se­quent list­ing on the floor of the Ex­change.

Fur­ther­more, he said the pub­lic of­fer for the Eleme Petro­chem­i­cal, a mem­ber of the In­do­rama Group, is ex­pected to hit the mar­ket by the end of March 2019.

Ac­cord­ing to him, the process of fi­nal­is­ing all the doc­u­men­ta­tion re­quired for that pub­lic of­fer would be con­cluded by Fe­bru­ary, af­ter which the shares would be of­fered for pub­lic par­tic­i­pa­tion in March.

“By way of pub­lic of­fer, we are ex­pect­ing that in the next few months, Nige­ria Rein­sur­ance should also be com­ing to the mar­ket. We are also by way of core in­vestors’ sale, pri­vatis­ing Afam Power Plant, which is a power gen­er­a­tion com­pany. We are also look­ing at pri­vatis- ing at least three na­tional in­te­grated power plants - Geregu in Kogi State, Cal­abar Power Plant, and Omo­toso Power Plant.

“By Jan­uary, we should have con­cluded on the sale of Afam Power Plant and the sale of Yola Dis­tri­bu­tion. These are some of the as­sets that we are bring­ing to the mar­ket on be­half of the Fed­eral Gov­ern­ment.”

In re­gards to Sahcol, he re­called that the Fed­eral Gov­ern­ment prior to its pri­vati­sa­tion in 2009, owned 100 per cent stake in the com­pany, not­ing that the trans­ac­tion also en­tailed a full pri­vati­sa­tion and 100 per cent sale to the SI­FAX Group.

“How­ever, part of the un­der­stand­ing guid­ing the share sale agree­ment at that point in time, was that the Si­fax Group would of­fer to the pub­lic a cer­tain per­cent­age of the shares through a pub­lic of­fer­ing.”

He con­tin­ued: “We be­lieve es­sen­tially that when it comes to is­sues around what is usu­ally and sen­ti­men­tally viewed as na­tional pat­ri­mo­nial as­set, it is im­por­tant that you do not con­vey the per­spec­tive that these as­sets are be­ing sold to cronies, and friends of gov­ern­ment.

“We be­lieve that the most ver­i­ta­ble chan­nel to a democra­tised process of the sale of this as­set is through IPO, this gives the gen­er­al­ity of Nige­ri­ans the op­por­tu­nity to buy into this pre­vi­ously state-owned as­set ac­cord­ing to their ca­pac­ity, and that is why we are do­ing this at this point in time.”

How­ever, share­hold­ers were ap­pre­hen­sive about 6the tim-

ing of the IPOS in view of the forth­com­ing gen­eral elec­tions.

They in­sisted that the tim­ing is quite un­fa­vor­able, and had urged the pro­mot­ers to de­fer the IPO un­til af­ter the elec­tions to en­able in­vestors pre­pare for the of­fer to at­tract in­creased par­tic­i­pa­tion.

For in­stance, the for­mer Sec­re­tary-gen­eral, In­de­pen­dence Share­hold­ers As­so­ci­a­tion of Nige­ria, Adebayo Adeleke, had ar­gued that the IPO com­ing at this time is al­ready tar­geted at strate­gic in­vestors and not re­tail share­hold­ers, be­cause the tim­ing would not at­tract full par­tic­i­pa­tion from lo­cal in­vestors.

“They (BPE) can­not bring it at a time of the year when we are fac­ing elec­tion. Why are they in a hurry to float within a month, it has been there for decades and they want to sell off at this tur­bu­lent era, un­less you have back­door ar­range­ment,” he said.

But Okoh in­sisted that the tim­ing was right, say­ing: “We know that the cap­i­tal mar­ket is slightly chal­lenged, but our be­lief is that the ac­cep­tance of the of­fer is a func­tion of the value of the en­ter­prise of the busi­ness.

“Un­like many other com­pa­nies that may be strug­gling in the econ­omy, SAHCOL is do­ing ex­tremely well. If you look at the fi­nan­cial state­ment, and the his­tory of in­vest­ment that has taken place by the core in­vestor over the past 10 years; we be­lieve that it com­mands value at this point in time.”

The Chair­man of SAHCOL, Dr Taiwo Afo­labi, said the com­pany has built strong com­pe­tence as one of the lead­ing avi­a­tion ground han­dling ser­vice providers in Nige­ria, grow­ing its mar­ket share from 21 per cent in 2009 to over 40 per cent.

Ac­cord­ing to him, with over 100 per cent growth in rev­enue and N15 bil­lion in net as­set, cou­pled with mas­sive in­vest­ment made in in­fra­struc­ture, SAHCOL is well-po­si­tioned for growth.

“SAHCOL’S fu­ture strat­egy is to cre­ate long term share­holder value through the prof­itable op­er­a­tion and ex­pan- sion of its busi­ness be­yond Nige­ria, and into other West African mar­kets with a vi­sion to be­come the lead­ing provider of pas­sen­ger, ramp and cargo han­dling ser­vices in the West Africa sub-re­gion.

“In or­der to achieve this ob­jec­tive, SAHCOL seeks to con­tin­u­ally pur­sue growth and op­por­tu­ni­ties con­sis­tent with its busi­ness op­er­a­tions with pri­mary fo­cus on op­er­a­tional ex­cel­lence and ef­fi­ciency.”

Pres­i­dent, Man­u­fac­tur­ers As­so­ci­a­tion of Nige­ria (MAN) Mansur Ahmed (left); Di­rec­tor-gen­eral, MAN, Se­gun Ajayi-kadir; Ex­ec­u­tive Sec­re­tary /Chief Ex­ec­u­tive Of­fi­cer, Nige­rian Ship­pers’ Coun­cil (NSC) Has­san Bello, dur­ing a cour­tesy visit of NSC to MAN in La­gos.

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