Business
Thyssen hit by doubts $1.2 billion fundraising is enough
FRANKFURT – ThyssenKrupp has raised 882 million euros ($1.2 billion) in a sale of new shares, less than some analysts think it will need to pursue a turnaround after it failed to sell a loss-making plant and was forced to take back two others.
The fundraising saw activist shareholder Cevian lift its stake to over 10 percent, sources familiar with the matter said, which could step up the pressure on Germany’s largest steelmaker to consider a bigger shake-up, such as more asset sales.
ThyssenKrupp, which has suffered three straight years of losses and racked up debts, is trying to move away from a bulk steel market hit by weak economies and overcapacity to more profitable products such as elevators and factory components.
But the group has struggled to extricate itself from its Steel Americas business and on Friday said it had only managed to sell its U.S. finishing plant, leaving it with a loss-making steel slab mill in Brazil. It was also forced to take back an Italian steel plant and an alloy unit sold last year.
“We think that the size of the capital increase is too small,” Metzler analyst Lars Hettche said, adding any new problems at the Brazilian steel mill or the re-acquired businesses could trigger the need for another capital hike.
ThyssenKrupp shares were down 2.4 percent at 17.21 euros by 0945 ET on Tuesday, extending Monday’s drop of 8 percent.
Its five-year credit default swaps (CDS) rose 4.2 percent to 243 basis points, according to Markit data, increasing the cost of insuring the company’s debt against default.
ThyssenKrupp, long viewed as a symbol of Germany’s industrial prowess, placed 51.5 million new shares with institutional investors at 17.15 euros apiece. That was at the lower end of the 17.05 to 17.635 euros range they were offered at and a discount of 2.8 percent to Monday’s closing price.
The proceeds will be used to cut the group’s net debt, which stood at about 5 billion euros at the end of September, and reduce its gearing – the ratio of its net debt to equity. In September, the group had to secure a waiver from its banks after its gearing breached the 150 percent level that could have seen creditors prematurely cancel a 2.5 billion euro credit line.
Analysts said the share sale and U.S. deal should cut ThyssenKrupp’s gearing to just above 100 percent from 200.6 percent at the end of September. That is still far above 34 percent at world No. 1 steelmaker ArcelorMittal (ISPA.AS) and an industry average of 60-70 percent.
“The capital increase eases the pressure a bit,” said Thomas Hechtfischer of shareholder rights group DSW. “But it would be difficult to digest any more bad news.”
SHIFT IN INFLUENCE
The share sale also resulted in a shift in ThyssenKrupp’s shareholder base, giving more power to Cevian, which has so far backed management’s plan to sell non-core assets and cut costs.
Meanwhile, the Krupp Foundation, ThyssenKrupp’s top shareholder and widely seen as a shield against takeovers or a break up of the business, did not buy new stock, allowing its stake to be cut to 23 percent from 25.3 percent.
That means that the Krupp Foundation may have to hand over one seat on ThyssenKrupp’s supervisory board to Cevian, which prior to the fundraising had owned a stake of 6.1 percent.
Cevian declined to comment.
“I would welcome it if the Foundation’s stake shrank,” Union Investment fund manager Joerg Schneider, who holds shares in ThyssenKrupp, told Reuters ahead of the capital increase.
Some investors have criticized the Foundation for blocking more radical change at the company.
With ThyssenKrupp’s finances still under pressure – credit rating agency Moody’s reaffirmed its negative outlook on the company on Tuesday – some analysts said the group might have to consider more asset sales.
Baader Bank analyst Christian Obst said it could sell its components technology business, which makes car parts such as crankshafts and engine components, or could merge its steel trading business with its Italian plant to sell as a package.
But finance chief Guido Kerkhoff on Saturday brushed off speculation that ThyssenKrupp could sell any of its capital goods businesses, and analysts said the Krupp Foundation’s influence was strong enough to make a break-up very difficult.
DRAIN ON FINANCES
On Friday, ThyssenKrupp agreed to sell its U.S. plant in Alabama to ArcelorMittal and Nippon Steel & Sumitomo Metal Corp (5401.T) for $1.55 billion, the low end of expectations and leaving its Brazilian problem unresolved.
A supply agreement for the Brazilian mill, part of the U.S. deal, guarantees at least 40 percent utilization for the next few years, but analysts said there was so much excess capacity in the market that business would remain tough.
ThyssenKrupp’s Steel Americas business cost it almost 13 billion euros in investment and losses over six years, after plans to produce cheap slabs in Brazil and ship them to the United States to make products for cars fell apart when Brazil’s currency rose and demand for vehicles slowed.
The German firm was also forced to take back a steel plant at Terni in Italy and an alloy unit sold to Outokumpu, as the Finnish steelmaker – trying to overhaul its own finances – returned them in exchange for cancelling a 1.25 billion euro loan ThyssenKrupp gave it to finance a wider deal.
The businesses will require investment, further draining ThyssenKrupp’s finances. Analysts say the Terni plant is loss-making and needs to be restructured, while the alloy unit, though profitable, is declining.
– REUTERS
Business
Tinubu Moves To Transform Tragedy To Prosperity With Livestock Investment
Nigeria’s President, Bola Ahmed Tinubu is of the view that his administration’s renewed focus in driving international and local investments into livestock sector of the agricultural value-chain will end the crisis of farmer-herder clashes, eradicate hunger and poverty in addition to promoting economic prosperity.
President Tinubu said this Thursday in Rio de Janeiro, Brazil at the signing of a Letter of Intent between the Nigerian Government and the JBS S.A, one of the top three largest meat processing companies globally.
“What we are doing right now is that we are solving a problem that afflicted humanity in that part of Africa, clashes between farmers and migrating cows that have caused some life and bloodshed when there is a modern, civilized way to solve those problems and even bring a successful economy out of it.
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“We are trying to turn a situation of tragedy, hopelessness into economic opportunity, see through problems and see the opportunity that is involved in it.”
The Nigerian leader called on the company to see the considerable potentials in what he called the $2.5billion livestock investment opportunities in Nigeria, especially with its huge population and tap into it, given JBS S.A’s globally recognized expertise in the area of guaranteeing food security.
“We’ve heard so much about you in terms of the reputation, and we believe in the partnership we are forging today.
“Food security is extremely important. As we talk right now, there is hunger. However, there is huge hope. And you are one of those hopes that we are looking at.”
President Tinubu told the JBS top executives that Nigeria is ready to do business with them, assuring them of a good return on their investment.
Prior to his visit to Brazil, President had commissioned a team of Nigerian officials and private sector players to take the advantage of the G20 Leaders’ Summit in Rio to conduct a study tour of Sao Paulo, Brazil and explore the opportunities in livestock development, meat processing, seed development and multiplication for key grains.
In his remarks, the Minister of Livestock Development, Idi Muhktar Mahia, who led the delegation, reported to the President that the team embarked on guided, extended and intensive tours of companies on the scale of their global reach, the integrated nature of their operations as well as the deployment of advanced technology. He added that from their interactions with various companies, JBS S.A. was chosen being the second largest meat processing company in the world with the capacity to process 33,000 cattle daily and over eight million birds daily, using advanced zero-waste practices. The company employs over 200,000 people across its subsidiaries in more than 50 countries in the world including United States, Canada, Mexico, Saudi Arabia among others.
Wesley Batista, founder and President of the JBS group, said the company is the largest employer of labour in Brazil with over $79 billion dollars revenue already in year 2024.
“We are glad to work with Nigeria to work together to develop the livestock industry there. We think it’s a good opportunity for our business in Nigeria and Africa as we believe Nigeria can be the center of supply of protein to many countries in Africa. We look forward to working with you. We are almost in December and this year is almost gone. We hope to be in Nigeria as soon as possible,” the founder and Chief Executive said.
Other members of the delegation included Minister of State Agriculture and Food Security Hon. Aliyu Sabi Abdullahi, Co-chairman Presidential Livestock Reform Committee, Professor Attahiru Jega, the Secretary of the Committee, Professor Mohammed Kuta Yahya, and the Chief Executive Officer of Nigerian Investment Promotion Council, Aisha Rimi.
Business
NANTA Champions Nigeria’s Tourism Revival With ₦742m Investment
The National Association of Nigeria Travel Agencies (NANTA) has disclosed an investment of ₦742 million over the past three years to position Nigeria as a premier tourism destination at the annual World Travel Market (WTM) in London.
Speaking in Lagos on Thursday, NANTA’s immediate past president, Mrs. Susan Akporiaye, revealed that the funds were used for exhibition pavilions, magazine publications, and logistical support for members attending the prestigious trade show.
“In three years, NANTA has spent ₦742,226,100 to deliberately put Nigeria on the global tourism map at the WTM. This was achieved with only skeletal support in 2022 and 2023,” Akporiaye said.
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According to Akporiaye, the association received minimal support in its early years of participation.
In 2022, La Campagne Tropicana Beach Resort and Air Peace contributed by placing advertisements on the Nigerian pavilion and in the association’s magazine. By 2023, Ibom Air joined the effort, supporting NANTA with adverts, while La Campagne Tropicana maintained its support.
The 2024 edition, however, marked a turning point. Akporiaye noted that for the first time, Ibom Air went beyond advertisements to co-exhibit, alongside Eko Hotels and Sabre Travel Network. Their contributions made Nigeria’s representation at WTM more robust and impactful.
“Sabre Travel Network also supported us, so we had their graphics, as well as Ibom Air’s, displayed on our stand. Their contributions made our 2024 participation very grand,” she added.
Akporiaye highlighted that 90% of the funds for WTM participation came directly from NANTA members, underscoring their commitment to Nigeria’s tourism development.
“This shows that we are true patriots, and we deserve national recognition for our efforts,” she said.
NANTA began attending the WTM in 2022 to fill the gap left by Nigeria’s absence from the event for over 10 years.
The association saw the need to promote the country’s tourism potential and create international business opportunities for its members.
“It’s been a wonderful and successful three years that NANTA has participated in WTM, filling the gap left by Nigeria’s absence for over 10 years. We are glad to have handed over the baton of Nigeria’s participation at WTM to the Nigerian government this year,” Akporiaye said.
Through its participation, NANTA has secured affiliations with international tourism boards, organized product training for members, and raised awareness about Nigeria as a destination.
These efforts have also led to partnerships with global airlines and travel boards, fostering significant growth for members’ businesses.
“Our participation at WTM has helped members’ businesses grow significantly. We have formed partnerships with airlines and travel boards worldwide.
“Our greatest achievement at WTM is drawing Nigeria’s attention back to the need to exhibit at the global travel market,” Akporiaye said.
The initiative has also inspired members to expand their horizons into global Meetings, Incentives, Conferences, and Exhibitions (MICE) events.
Business
CSR: Dangote Cement Fuels Education With Support Projects At Lagos Schools
Dangote Cement Plc, a leading cement manufacturer, has donated multi-million Naira educational support projects to secondary schools in Lagos as part of its social investment initiatives.
The company in a statement explained that the move is aimed at complementing the government’s efforts in providing quality and sustainable education in the state.
It was gathered that the projects were commissioned and handed over to various schools in the Ikoyi-Obalende Local Council Development Area, align with the Sustainable Development Goals (SDGs) on education. These goals focus on ensuring inclusive, equitable, and quality education, as well as promoting lifelong learning opportunities for all.
The projects, warmly received by both teachers and students, include 100 dual school desks for Ilado Community Junior High School and Wahab Folawiyo Senior High School, alongside a refurbished and fully equipped Chemistry Laboratory at the Government Senior Secondary School, Ikoyi.
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Also donated were reading tables, chairs, and bookshelves for the library at Government Junior Secondary School, Ikoyi.
A celebration also took place at Falomo Junior High School and Ireti Senior Grammar School, both in Ikoyi, where the company donated 20 brand-new desktop computers to the ICT departments of the schools.
At the event at Government Junior College, Ikoyi, the Group Managing Director of Dangote Cement Plc, Arvind Pathak, explained that social investment is a key part of Dangote Cement’s operations.
He said the company is dedicated to giving back to society and supporting the sustainable development of local communities, especially in areas where it operates.
Pathak’s address was delivered by Wakeel Olayiwola, the Head of Social Performance at Dangote Cement Plc.
He said, “education holds a pivotal role in the development and empowerment of the youths in the country. As a cornerstone for societal advancement, it serves as a critical tool for personal growth, economic development, and national progress. An educated youth population not only fosters individual success but also contributes significantly to the nation’s overall wellbeing.
“At Dangote Cement, we believe that providing quality education to our youth is vital and should not be left solely as the government’s responsibility. Thus, we aim to partner with the government to enhance educational development in this regard.
“The projects we are handing over today are part of our 2024 Corporate Social Responsibility (CSR) programme for selected schools within the neighbourhood of Dangote Cement Plc’s Head Office in Ikoyi, Lagos. These projects were selected based on need assessments in collaboration with the schools.”
As a responsible corporate entity, Pathak noted that Dangote Cement’s commitment to societal wellbeing, with investments in four key areas: Education, Healthcare, Infrastructure, and Economic Empowerment programmes.
“This year, our plants in Ibese, Ogun State; Obajana, Kogi State; Gboko, Benue State; Okpella, Edo State; and our Pan-African operations have launched several social investment projects. These efforts contribute to the quality of life in our host communities and support sustainable national development,” he added.
Pathak thanked the Lagos State Government, the Tutor General/Permanent Secretary, and the school management teams for their collaboration in identifying the schools’ needs and ensuring the timely completion of the projects.
Dr. Idowu Olufunke Oyetola, Tutor General and Permanent Secretary of Education District 3, Lagos State Ministry of Education, who was represented by Bolaji Rotimi Ajayi, Director of School Administration, praised the long-standing partnership with Dangote Cement, noting that the schools selected for the donations were fortunate beneficiaries. “We hope for more collaborations that will positively impact education,” she added.
The principals of the recipient schools expressed their gratitude after the formal handover of the projects.
Odunlami Olubunmi, Principal of Ilado Community Junior High School, Ikoyi, thanked Dangote Cement for the new desks, stating that the donation would significantly improve the learning environment for the students, helping to prepare them for a brighter future.
Bamidele Ayotunde, Principal of the school with the refurbished laboratory, urged other businesses to follow Dangote Cement’s example in supporting local schools, pointing out the positive impact of the laboratory’s renovation on the school’s learning environment.
The Principal of Ireti Senior Grammar School, Ikoyi, whose school received the new desktop computers, described the donation as a positive development and expressed hope for more support in the future.
Pupils also shared their appreciation for the contributions. Abiola Jamaudeen, a lab prefect at Government Senior College, Ikoyi, promised that the laboratory would be used to its fullest potential and well-maintained.
Lawal Rumayzo Abdulsalam, a student at the school, said the new library equipment would foster better reading habits and create a more conducive environment for learning, ultimately preparing them for success. Some students even performed special songs to welcome the Dangote team to their schools.