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MTN Nigeria’s 575m shares public offer closes

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Application list for the ongoing retail public offering by Nigeria’s largest telecommunications company, MTN Nigeria Communications (MTN Nigeria) Plc will close by the end of business today.

MTN Nigeria is offering 575 million ordinary shares of 50 kobo each to the general retail investing public at a price of N169 per share.

Application list for the offer had opened on December 1, 2021 and it is scheduled to close by 5.00 pm on December 14, 2021.

Officials of MTN Nigeria and receiving agents to the offer said the closing date remains as scheduled. There was no indication of any extension of the offer period as at the close of business yesterday.

Under the rules, the issuing company must apply and receive the approval of Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) for any extension of an offer period. The parties to the offer did not indicate any such application or approval.

Minimum subscription to the retail offer is 20 shares and thereafter in multiples of 20 shares. The offer includes a bonus share of one share for every 20 shares bought by a retail investor subject to maximum bonus shares of 250 per investor. However, to qualify for the free share such retail investors must hold the shares allotted to the after the allotment date for at least a period of 12 months

The public offer is an offer for sale by MTN Group, which is divesting part of its shares in MTN Nigeria to allow Nigerian institutional and retail investors to buy equities in the telecommunications giant. The book building for institutional investors was done last week with a price range of N165 and N175.

Chief Executive Officer, MTN Nigeria Communications (MTN Nigeria) Plc, Karl Toriola, said the success and growth of MTN Nigeria is intrinsically linked to that of Nigeria and Nigerians and it is very exciting to offer Nigerians the opportunity to own shares in MTN Nigeria.

“Our journey to becoming the largest network in Nigeria has been humbling, but we still have a long way to go. There is much more to do to support the evolution of an inclusive digital economy, and we continue to invest as we evolve into a truly digital operator, capable of seamlessly integrating value across the evolving telecommunications, digital and fintech segments,” Toriola said.

President and Chief Executive Officer, MTN Group, Ralph Mupita, said the offer aligns with MTN Group’s strategic priority to create shared value.

He noted that in the last 20 years, the group has worked diligently to connect 68 million subscribers onto voice and data networks and ensure that it delivers the benefits of a modern connected life.

“With this offer, we will contribute to the further deepening of Nigeria’s equity capital markets. It is the first in a series of transactions as the MTN Group implements its plans to ensure broad-based ownership by reducing its shareholding in MTN Nigeria to 65 per cent over time. We thank the Nigerian authorities for the support we as MTN Group have received in the various approvals related to this offer, and remain committed to play our humble role in driving digital and financial inclusion across the country over the medium-term,” Mupita said.

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Intel to invest $20 billion in U.S. chip-making facility

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Intel Corp said on Friday it would invest up to $100 billion to build potentially the world’s largest chip-making complex in Ohio, looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to cars.

The move is part of Chief Executive Officer Pat Gelsinger’s strategy to restore Intel’s dominance in chip making and reduce America’s reliance on Asian manufacturing hubs, which have a tight hold on the market.

An initial $20 billion investment – the largest in Ohio’s history – on a 1,000-acre site in New Albany will create 3,000 jobs, Gelsinger said. That could grow to $100 billion with eight total fabrication plants and would be the largest investment on record in Ohio, he told Reuters.

Dubbed the silicon heartland, it could become “the largest semiconductor manufacturing location on the planet,” he said.

While chipmakers are scrambling to boost output, Intel’s plans for new factories will not alleviate the current supply crunch, because such complexes take years to build.

Gelsinger reiterated on Friday he expected the chip shortages to persist into 2023.

To dramatically increase chip production in the United States, the Biden administration aims to persuade Congress to approve $52 billion in subsidy funding. read more

U.S. House Speaker Nancy Pelosi said on Friday the House of Representatives would soon introduce a bill on competitiveness to help bolster semiconductor investment and supply chains. That would include the $52 billion funding.

U.S. President Joe Biden touted Intel’s investment on Friday at a White House event with Gelsinger and again made the case for congressional action.

“China is doing everything it can to take over the global market so they can try to out compete the rest of us,” Biden said.

U.S. Commerce Secretary Gina Raimondo said at the event the current semiconductor supply chain is “far too dependent on conditions and countries halfway around the world.”

Gelsinger said without government funding “we’re still going to start the Ohio site. It’s just not going to happen as fast and it’s not going to grow as big as quickly.”

THE CHIP FEAST AND FAMINE

Intel ceded the No. 1 semiconductor vendor spot to Samsung Electronics Co Ltd (005930.KS) in 2021, dropping to second with growth of just 0.5%, the lowest rate in the top 25, data from Gartner showed.

As part of its turnaround plan to become a major manufacturer of chips for outside customers, Intel broke ground on two factories in Arizona in September. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six. read more

Gelsinger told Reuters he still hoped to announce another major manufacturing site in Europe in coming months.

It is not just Intel ramping up investments. Rivals Samsung Electronics and Taiwan Semiconductor Manufacturing Co or TSMC also have announced big investment plans in the U.S. And that’s raising questions about a glut in chips going forward.

“We still have years in front of us before we’re even having a semblance of supply demand balance,” said Gelsinger. “Ask yourself what portion of your life is not becoming more digital.”

“Yes, the industry is growing, and maybe the metaverse solves world hunger for the semiconductor industry. But there is a big bubble coming,” said Alan Priestley, an analyst at Gartner.

U.S.-CHINA TECH WAR

The U.S. build up comes as a tech war between the U.S. and China is causing a decoupling of certain technologies, such as chips. Companies looking to sell technologies to China are considering basing outside of the U.S. to avoid being snagged by U.S. export control rules. China is also investing heavily in its semiconductor manufacturing capacity.

While Gelsinger also touted the security and economic benefits of boosting U.S. chip production on Friday, Bloomberg reported in November that the Biden administration pushed back against a prior plan by the company to boost silicon wafer production in China over national security concerns.

Intel has drawn fire for its decision to delete references to Xinjiang from an annual letter to suppliers after the chipmaker faced a backlash in China for asking suppliers to avoid the sanctions-hit region.

When asked about it in a briefing last month, White House press secretary Jen Psaki said she could not comment on the company specifically, but said “American companies should never feel the need to apologize for standing up for fundamental human rights or opposing repression,” reiterating a call to industry to ensure that they are not sourcing products that involve forced labor from Xinjiang and urging companies to oppose China’s “weaponizing of its markets to stifle support for human rights.”

Intel’s Ohio investment is expected to attract partners and suppliers. Air Products (APD.N), Applied Materials (AMAT.O), LAM Research (LRCX.O) and Ultra Clean Technology have shown interest in establishing a presence in the region, Intel said.

Construction of the first two factories is expected to begin late in 2022 and production in 2025.

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Nigeria attracts $31.82bn from United States, five others in 33 months

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Capital inflows from the United Kingdom, the United States, South Africa, the United Arab Emirates, the Netherlands, and Mauritius hit $31.82bn in three years, according to data from the National Bureau of Statistics.

The NBS data showed that the six countries accounted for 83.32 per cent of the total capital of $38.18bn imported into Nigeria from over 100 countries from January 2019 to September 2021.

The UK accounted for the highest foreign inflow of $17.34bn, followed by the US ($5.79bn), South Africa ($3.99bn), UAE ($1.80bn), Netherlands ($1.68bn), and Mauritius ($1.09bn).

According to the NBS, capital importation data is obtained from the Central Bank of Nigeria and includes imported physical capital, such as equipment, and financial capital importation.

It added that capital importation comprises three main investment categories, namely foreign direct investment, foreign portfolio investment, and other investments.

It said FDI includes equity and other capital, while FPI includes equity, bonds, and money market instruments; ‘other investments’ include trade credits, loans, currency deposits, and other claims.

In 2019, Capital inflow from the six countries declined from $20.09bn in 2019 to $7.94bn in 2020. It stood at $3.78bn in the nine months to September 2021.

The Managing Director, Cowry Asset Management, Johnson Chukwu, attributed the drop in capital importation to the fall in FPI.

According to him, portfolio investors are probably discouraged to invest in the Nigerian market due to foreign exchange illiquidity.

He said, “The decline in capital importation has been consistent for the past three years, if you look at the data.

“In terms of portfolio investment, which is the major component, I think the issue is that foreign portfolio investors have likely stayed away from the Nigerian market because of foreign exchange illiquidity, as some of the funds that are trapped are yet to be accessed.”

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Airbus cancels $6bn contract with Qatar Airways after paint fight

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Airbus has cancelled a $6bn contract with Qatar Airways for 50 of its new A321neo passenger jets, escalating a legal battle between the two companies over paint on the recently delivered A350s.

Qatar Airways called Airbus’s decision announced on Friday “a matter of considerable regret and frustration”.

In December, Airbus was taken to court by Qatar Airways in London, following a series of alleged problems with the Airbus A350 aircraft.

The airline complained the paint on the recently delivered Airbus A350s was cracking and peeling, exposing copper meshing used to insulate the aircraft against lightning strike.

It is seeking more than $600m in compensation after grounding the affected aircraft – 21 of its 53 A350 jets – claiming the paint issue is a safety risk.

The deal was reportedly worth $6.35bn when it was finalised in December 2017.

Qatar Airways published a video on social media on Friday of the scarred exterior of grounded A350 jets that the airline said underscored “serious and legitimate safety concerns”.

The European Union Aviation Safety Agency independently assessed the issue and found no safety concerns.

“There is no reasonable or rational basis” for Qatari regulators to have grounded the A350s operated by Qatar Airways, Airbus said in documents prepared for a London court hearing on Thursday.

It accused Qatar Airways of instigating the grounding as it was in its own financial interest to keep the aircraft on the ground in light of the coronavirus pandemic collapse in demand for air travel.

Qatar Airways rejected the claims in a statement on Friday.

“These defects are not superficial and one of the defects causes the aircraft’s lightning protection system to be exposed and damaged,” it said. “We continue to urge Airbus to undertake a satisfactory root cause analysis into the cause of the defects.”

An investigation by Reuters news agency showed at least five other airlines reported A350 paint or skin flaws since 2016, well before Qatar raised concerns in November 2020 when an attempt to repaint a jet in World Cup livery exposed some 980 defects.

Airbus has said it is looking at changing the design of anti-lightning mesh for future A350s, but insisted there is adequate backup lightning protection. It says Qatar is undermining global protocols by seeking leverage over safety.

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