The 2023 DealMakers AFRICA Annual issue is out.
Criteria changes are coming for West Africa deal and transaction tables... watch this space!
Access Holdings Plc’s acquisition of majority stake in First Guarantee Pension, an indirect equity stake in Sigma Pensions and their
subsequent merger
The acquisition by Access of a majority stake in First Guarantee Pension Limited (FGPL) was pivotal to the group’s plan to evolve from a narrow banking business to a financial services holding company, positioned to gain relevant scale across Africa and beyond banking verticals.
Prior to Access’ acquisition of an 80.2% stake in FGPL in August 2022, the financial holding company divested from the pension funds custody sector with the sale of Access Pension Fund Custodian to First Bank of Nigeria Holdings. The FGPL transaction was structured in two phases. Initially, Access acquired a 66.7% stake in the target, which entitled Access to participate in the rights issue. FGPL faced a strict regulatory deadline within which it was required to meet the regulatory minimum share capital. Upon completion, its capital increased by four times the minimum required.
Following the finalisation of its FGPL stake, Access – via its new subsidiary – indirectly acquired a 37.36% equity stake in Sigma Pensions through Actis Golf Nigeria. Following the acquisition, FGPL and Sigma Pensions entered into a scheme of arrangement for the merger of both entities, with Sigma Pensions remaining as the enlarged entity.
According to Access CEO Herbert Wigwe, “this transaction is a natural evolution for us. Over the last 20 years, we have set our sights on and delivered ambitious plans to transform the African financial services landscape. We will leverage our well-established culture of strong corporate governance, risk management, cutting-edge technology and digital capabilities to deliver high standards of professionalism in the management of pension assets to the benefit of our stakeholders.”
The merger creates Nigeria’s fourth largest Pension Fund Administrator by assets under management, enabling it to leverage the synergies of the merged entities and a wider distribution network.
The acquisition of Sigma Pensions and FGPL, and their subsequent merger, received the requisite regulatory approvals from the Federal Competition and Consumer Protection Commission, the National Pension Commission and the Central Bank of Nigeria.
Advisers: Coronation Merchant Bank, Banwo & Ighodalo and Aluko Oyebode.
DEAL OF THE YEAR 2022
WEST AFRICA
Late last year, the joint venture between Chevron Nigeria and the Nigerian National Petroleum Corporation secured a USS$1,4 billion funding package from 16 lenders to finance the Kolmani Integrated Development project.
The project includes the drilling of 37 wells, both on and offshore in the Escravos area of the Niger Delta region, over the fiscal period 2023 to 2026. The development wells include oil and gas. The financing arrangement will be used by the joint venture to monetise reserves and increase production by supporting domestic gas supply and arresting a decline in oil production. It is proposed that the gas will be diverted to meet domestic supply obligations, which speaks to the joint venture’s energy transition plan.
Chevron Nigeria and the Nigerian National Petroleum
Corporation forward sale financing
In February 2022, Guaranty Trust Holding Company (GTCO), a diversified financial services company with N5.144 trillion in assets, announced that it had concluded the acquisition of Investment One Pension Managers (IOPM) and Investment One Funds Management (IOFM), held by Investment One Financial Services.
Acquisition by Guaranty Trust of Pension Managers and
Investment One Funds Management
Runners Up (in no particular order)
WEST AFRICA
IOPM is licensed by the Nigerian Pensions Commission to operate as a Pension Fund Administrator in the country, and IOFM is licensed by the Securities and Exchange Commission to undertake fund management and investment services on behalf of clients, and to manage collective investment schemes as a corporate investment adviser. The deal is set to expand GTCO’s product and service offerings into the asset management business, positioning it to become a fully-fledged end-to-end financial services company. In a statement, the company said that it would focus on replicating its digital-first customer-centric retail strategy to create distribution channels for wealth solutions for both institutional and retail clients.
Guaranty Trust Bank Plc was incorporated as a limited liability company licensed to provide commercial and other banking services to the Nigerian public in 1990. In September 1996, it became a publicly quoted company and undertook its second share offering in 2004, successfully raising over N11 billion from Nigerian investors to expand its operations. GTCO Plc was created in July 2021, following the corporate reorganisation of Guaranty Trust Bank Plc into a Holding Company.
Advisers: Exotix Advisory, Vetiva Capital Management, Aluko & Oyebode, Banwo & Ighodalo and Deloitte & Touche (Nigeria).
The financing is a positive development not only for the industry, but for the Nigerian economy. Security challenges and the absence of long-term investment in the oil and gas sector prior to this have been blamed for the low crude oil production in the country, resulting in Nigeria’s inability to meet its OPEC quota. Pegged at 1.8 million barrels per day (bpd), Nigeria has struggled over the past few years to produce between 1.3 million and 1.4 million bpd.
According to a statement released at the time on the announcement, the project has a world-class resources base that will deliver 97 million bpd of gas and 166 million bpd of oil – a total of 263 million bpd. Further, taxes and royalties would result in c.$6 billion in earnings for the state over the next 20 years.
Advisers: Standard Chartered Bank (UK), United Bank for Africa, G Elias and Banwo & Ighodalo.
