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Shell’s Sale of Nigeria Assets Faces Dollar-Crunch Challenge
“When I look at the books of Nigerian banks today, I don’t see a lot of dollar liquidity,” Agbaje told an investor conference call in Lagos on Tuesday. “It’s becoming a very difficult deal for people to pull off.”
Nigerian banks, which in 2013 syndicated $3.3 billion debt to Dangote Industries for a refinery and petrochemical plant and recently financed Heirs Holding’s $1.1 billion acquisition of OML 17, have seen their capacity to take on such deals wane considerably. A slump in crude prices and an economic downturn arising from the coronavirus pandemic curbed foreign-currency flows into Africa’s largest crude producer and pressured reserves.
Guaranty Trust, which transited to a financial holding company last month, is seeking central bank’s license to set up a payment firm to cushion challenges in its core operations, according to the CEO. It is also awaiting the approval of regulators for an acquisition that will enable it operate pension and asset management businesses, he said.
The lender’s net income dropped 16% in the first half to 78.1 billion naira($189.8 million) after interest earnings from loans and investment securities declined 22% to 116.9 billion naira. “Our desire in the medium to long term is that the three new businesses will contribute about 30% of group profit.”
Source: Bloomberg Business News