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Tuesday, 17th July 2018
1:55:15am

Business

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China National Offshore Oil Corp (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.

During a visit to Nigeria’s state-owned NNPC, CNOOC Chief Executive Yuan Guangyu said the Beijing-based oil company had invested more than $14 billion in its Nigerian operations and expressed readiness to invest more. 

Guangyu said Nigeria was their largest investment destination and also asked the NNPC to seek common grounds with CNOOC for enhanced productivity.

Nigeria has been holding talks with oil majors over new finance agreements for joint ventures since last year. The NNPC last year signed financing agreements with Chevron and Shell worth at least $780 million to boost crude production and reserves.

Other western oil companies, including ExxonMobil (XOM.N), operate in Nigeria through joint ventures with NNPC.

-Reuters 

McKinsey’s new global head will on Monday apologise to South Africans for work the firm did with friends of scandal-plagued former president Jacob Zuma, an ill-fated deal that tarnished the reputation of the world’s biggest consultancy. 

McKinsey has lost most of its clients in South Africa since it emerged last year it had partnered with local consultancy Trillian in order to win a 1.6 billion rand ($120 million) contract with state power utility Eskom in 2016.

Trillian was then controlled by the Guptas, three brothers who are under investigation over accusations that they used their friendship with Zuma to fraudulently win government contracts worth hundreds of millions of dollars.

Zuma and the Guptas deny any wrongdoing. Police have a warrant of arrest out for at least one of the Gupta brothers.

South Africa’s national prosecutor is pursuing a case over the contract between McKinsey, Trillian and Eskom which it says was unlawful and a “sham”.

McKinsey denies doing anything illegal.

Kevin Sneader, who was appointed McKinsey’s global managing partner in February, will make a speech in Johannesburg on Monday to “talk frankly and honestly” about the firm’s failings.

“On behalf of McKinsey & Company, I sincerely apologise to the people of South Africa. We are deeply sorry,” Sneader will say, according to a sample of the speech sent to Reuters.

“The trust of our clients and the public in South Africa is now, understandably, very low.”

McKinsey said it will this week pay back the 1 billion rand ($74 million) in fees it received for its share of the six months work it did with Trillian at Eskom.

Some of the criticism McKinsey has faced is over the fee it charged for such a short period of work to a struggling state company that has fallen deeper into financial crisis since the consultancy’s “turnaround programme”.

McKinsey had previously defended its fee structure but the firm is now conceding that it overcharged.

“The fee was weighted towards recovering our investment rather than being in line with Eskom’s situation. In that context the fee was too large,” Sneader says.

McKinsey is among several multinational firms to have become ensnared in a far-reaching scandal that has outraged South Africans who have watched state resources being looted while millions remain mired in poverty.

“To be brutally honest – we were too distant to understand the growing anger in South Africa,” Sneader says.

-Reuters

South Africa’s trade union Solidarity has been given a mandate by senior members to strike at energy giant Sasol over its plan to launch a share ownership scheme exclusively to black staff, a union source said on Tuesday.

South African government mediators last month cleared the Solidarity union, which represents predominately white workers, to strike over the dispute.

“Our senior representatives gave us the mandate to go on strike today,” the source told Reuters. “We will now start the process to do a strike vote with all our members.”

Under black economic empowerment rules, South African companies are required to meet quotas on black ownership, employment and procurement as part of a drive to reverse decades of exclusion under apartheid.

-Reuters

MTN Nigeria is yet to file its application for an initial public offering (IPO), Nigeria’s securities regulator said on Sunday, a much-anticipated share listing that could value the business at around $5 billion and help revitalise the local stock market. 

The Securities and Exchange Commission’s (SEC’s) statement came after domestic media reported on Thursday that the local arm of the South African telecoms giant was ready for its shares to be listed.

“Neither MTN Nigeria Limited nor any of its advisers or representatives has filed any application with the SEC regarding the said IPO,” the regulator said.

The firm also needs to convert itself from a private to a public company before it can then sell its shares.

The SEC said in Sunday’s statement that MTN Nigeria is private, meaning it has less than 50 shareholders, and there had been no request by the company or its advisers for any form of regulatory review. 

MTN did not respond to a phone call, text message and email seeking comment.

According to pre-IPO documents seen by Reuters in February, the telecoms firm planned to debut by July and raise at least $400 million to cut debt for its Nigeria unit, valued then at $5.23 billion.

Sources say the company wants to issue shares electronically. That has not been done before in Nigeria and needs new systems put in place to allow it.

MTN has picked Nigerian investment firm Chapel Hill Denham as lead manager, while South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital were chosen as joint issuers.

Africa’s biggest telecoms firm had planned to list its Nigerian unit in 2017, as part of a settlement with the Nigerian government over unregistered SIM cards for which it was fined $1.7 billion fine.

It subsequently delayed the IPO due to market conditions.

-Reuters

Ecobank has mandated international lenders to arrange investor meetings in Britain and the United States, after which it plans to issue a five-year dollar-denominated bond, the African bank said on Monday. 

Ecobank, which has operation in 36 African countries, has hired Deutsche Bank, Standard Bank and Standard Chartered to arrange meetings from June 18, it said.

Proceeds from the offering will be used for debt refinancing among other things, Ecobank said.

-Reuters

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