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Nigussie Hailu forfeits bottling company shares after court ruling

Ethiopian businessman Nigussie Hailu has lost his shares in the East African Bottling Share Company.

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Illustration: Bottling plant. ©Billionaires.Africa

Ethiopian businessman Nigussie Hailu has lost his shares in the East African Bottling Share Company (EABSC) following a ruling by Ethiopia’s Federal High Court. 

The EABSC is Coca-Cola’s bottlers in Ethiopia. Hailu, who has been the only indigenous stakeholder since 2017, owned roughly 32,624 shares.

The court froze his stake years ago and aimed to sell it off at a floor price of 58.2 million Birr ($1.4 million). The price was computed on the basis of a single share price of 1,784 Birr ($42.98), according to The Reporter Ethiopia.

Background 

Nigussie Hailu is one of several Ethiopian partners who bought the state-owned EABSC in 1995 from the former Ethiopian Privatization Agency. The others included Abinet Gebremesqel, Munir Duri, Dereje Yesuworq, Shadia Nadim and Hussein Abedella.

The five partners teamed up with the South African Bottling Company (SABCO) to buy the enterprise and then formed a private limited company, which was later transformed into a joint venture in 1999 under the name EABSC. 

However, Gebremesqel, Duri and Yesuworq became embroiled in a dispute with the company’s major shareholder over issues such as dividend payouts and their exclusion from the board. They further accused SABCO of mismanaging roughly 600 million Br ($14.46 million at current value).

The case, which was filed with Ethiopia’s high and supreme courts, ruled in favor of SABCO. However, the parties decided to negotiate out of court and agreed to a share buyout.

In 2018, SABCO bought the shares belonging to Gebremesqel, Duri and Yesuworq for 1 billion Birr ($37 million). The former shareholders remitted $200 million Br ($4.82 million) to the government for taxes. Gebremesqel took home $400 million Br ($9.64 million), while Duri and Yesuworq split the remaining funds.

In a statement, Gebremesqel said they decided to sell their shares due to the dispute, Food Business Africa reported. “We sold our shares after negotiating with the company, preserving our benefits and advantages,” Gebremesqel noted.

Hailu remained the only Ethiopian shareholder with a stake in EABSC since 2017. He has been fighting court battles for more than two decades on corruption charges involving then-Prime Minister Tamrat Layne.

The Supreme Court convicted Nigussie, Shadia, and Hussein of squandering and sharing $16 million borrowed from Mohammed Ali Al-Amoudi (Sheikh)*, illegally exporting 1,000 tons of coffee on Tamrat’s orders through a company owned by Shadia and manipulating the state to make purchases in a manner that went against the public interest.

The parties were imprisoned in 2000 for criminal liability and ordered to pay $4.2 million to the government to recover the coffee losses and $16 million to Al-Amoudi.

*Mohammed Ali Al-Amoudi (Sheikh) is an Ethiopian billionaire and Saudi citizen. He was Ethiopia’s richest person with a net worth a $8.1 billion in 2017, based on Forbes estimates. He was regarded as the second wealthiest Saudi Arabian in the world and the second richest person of African descent. In 2017, Crown Prince Mohammad Bin Salman of Saudi Arabia ordered his arrest on allegations of corruption, Gulf News reported. He was arrested alongside a group of princes and ministers and released after 14 months.

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Cameroonian multimillionaire banker Alain Nkontchou’s stake in Ecobank now worth $3.76 million

Nkontchou controls a beneficial 0.98-percent stake in the bank.

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Alain Nkontchou.

Cameroonian multimillionaire banker Alain Nkontchou’s stake in Ecobank Transnational Inc., a leading pan-African banking conglomerate, is now worth N1.56 billion ($3.76 million).

Ecobank is the leading independent regional banking group in West and Central Africa, serving wholesale and retail customers in 36 African countries.

In the first nine months of 2021, the Togo-based financial services conglomerate reported an 847-percent growth in profit from $27 million to $256 million thanks to improved efficiency in its banking operations.

Nkontchou, who holds a leadership position in the pan-African banking group as a chairman and non-executive director, controls a beneficial 0.98-percent stake, amounting to 179,019,674 shares.

As of press time, Jan. 18, shares in Ecobank on the Nigerian Exchange were trading at N8.7 ($0.021), unchanged from their opening price on the local bourse this morning, as bearish and bullish sentiments were cleared out evenly.

At this price, the market value of his 0.98-percent stake in the pan-African bank is valued at N1.56 billion ($3.76 million).

Nearly a month ago, Nkontchou spent N1.13 billion ($2.35 million) to complete the acquisition of an additional 0.72-percent stake, which amounts to 131,379,263 ordinary shares in the bank.

The deal saw his stake rise from 0.26 percent, or 47,640,411 shares, to 0.98 percent, or 179,019,674 shares. Since he acquired the shareholding, the market value of his stake has expanded from N1.32 billion ($3.19 million) to N1.56 billion ($3.76 million).

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Nigerian mogul Abdul Samad Rabiu’s food business posts huge profit since listing

The news comes despite a slump in fortified sugar sales and a single-digit increase in its direct production costs.

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Abdul Samad Rabiu.

Led by Nigerian billionaire businessman Abdul Samad Rabiu, the newly consolidated food business BUA Foods Plc has reported more than $39.9 million in profit in the first nine months of 2021.

The news comes despite a slump in fortified sugar sales and a single-digit increase in its direct production costs.

Its recently published unaudited financial statement for the first nine months of 2021 represents its first financial filing since its shares were listed on the Nigerian Exchange nearly two weeks ago.

Compared to last year’s figures, BUA Foods’ net profit rose by 6.8 percent from N15.53 billion ($37.5 million) in the first nine months of 2020 to N16.56 billion ($40 billion) at the end of the first nine-month period of 2021.

Its resilient financial performance in 2021, which led to the single-digit surge in profit, was driven by a 152-percent rise in sales by industrial sugar, pharmaceutical and food and beverage manufacturing companies.

Its performance during the nine-month period was also supported by the increased sale of sweeteners coupled with a decline in operating expenses from N2.4 billion ($5.8 million) in 2020 to N1.37 billion ($3.3 million) in 2021.

As a result, BUA Foods’ operating profit rose from N18.96 billion ($45.8 million) to N21.25 billion ($51.3 million), while its net profit increased by 6.8 percent.

During the nine-month period, the company’s total assets grew by 5.36 percent from N348.65 billion ($841.5 million) to N367.35 billion ($886.7 million), while the retained earnings linked to its shareholders increased from N112.7 billion ($272 million) to N129.3 billion ($312.1 million).

As of the opening of the Nigerian Exchange this morning, Jan. 18, shares in BUA Foods were trading at a price of N61.8 ($0.149) per share, 6.3-percent lower than their opening price on the local bourse yesterday.

Since listing on the Nigerian Exchange 12 days ago, BUA Foods’ stock price and market capitalization have soared by more than 54 percent thanks to sustained investor buying interest in the company.

The upward price movement saw the consolidated food company become the most capitalized consumer goods company on the Nigerian Exchange ahead of Nestle Nigeria Plc.

The price bump also pushed the net worth of Rabiu above the $7.9-billion mark, making him the second-wealthiest man in Nigeria ahead of telecom mogul Mike Adenuga.

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South African billionaire Michiel Le Roux gains more than $141.4 million in 27 days

Le Roux founded Capitec Bank, one of South Africa’s largest retail banks, about 21 years ago.

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South African billionaire Michiel Le Roux.

South African billionaire bank founder Michiel Le Roux has seen his net worth skyrocket by more than $141.4 million in the past 27 days, as shares in South Africa’s leading retail banking group, Capitec Bank, soar by 8.4 percent.

Le Roux, who founded Capitec Bank, one of South Africa’s largest retail banks, about 21 years ago, holds a substantial 11.41-percent stake amounting to 13,190,043 shares in the Stellenbosch-based banking group.

The multimillion-dollar surge in his net worth since Dec. 21, 2021 can be linked to a surge in the market value of his stake, as shares in Capitec Bank soared above the $138-per-share mark.

As of afternoon, Jan. 17, shares in the group were worth R2,132.12 ($138.57) per share, 1.91-percent lower than their opening price on the Johannesburg Stock Exchange that morning.

At that price, the market value of Le Roux’s stake is worth more than $1.82 billion, while the bank’s market capitalization is $16.4 billion.

Shares in the bank have increased from a price of R1,967.16 ($127.85) at the closing of trading on the Johannesburg Stock Exchange on Dec. 21, 2021 to R2,132.12 ($$138.57) at the time of drafting this report.

This translates to an 8.4-percent gain for the bank’s shareholders since December 2021.

As a result of the price bump, the market value of Le Roux’s stake has increased from N25.95 billion ($1.69 billion) to R2.18 billion ($1.83 billion) between Dec. 21, 2021 and Jan. 17. This led to a total R2.18-billion ($141.41 million) gain for the billionaire in the past 27 days.

In an effort to protect his stake in Capitec from downside risks and leverage it to secure debt funding, Le Roux executed hedging and financing transactions on 1.25 million shares in Capitec Bank against the volatility in the stock market.

The businessman completed the collar transaction in four tranches between August and December. At the current market price, the transaction is worth R2.5 billion ($157.2 million).

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