by Okey Ikechukwu

 

It is the same for Seplat, except that the latter has actually taken matters well beyond where Dangote is at the moment in the same market. The company is seen as capable of meeting the prime paradigms of international standards in its operations. 

When is a corporate organisation expanding business frontiers, breaking new grounds and taking real business risk in a positive sense? Chief Mike Adenuga and his ever-expanding empire is perhaps one good example of how grit, courage, foresight and resilience can be a game changer. Think back to the days when this particular businessman broke new grounds by daring to walk into the then scary world of telecoms. There were initial controversies, of course, but his Nigerian firm was the only indigenous organisation that rose to the occasion at the time. It was also the first player in the sector to show Nigerians that per second billing is not possible for GSM calls.

This is important to note, because many of our banks and corporate organisations are actually a motley crowd of doubtful positive impact on the economy. They are all posting incredible profits based on ‘phoney money’, procured through a rentier business climate and economy that makes no impact on job creation, enablement of SMEs and the capital needs of genuine investors. This is not to say that anyone is quarrelling with profits. In fact, the thing to protest against would be the absence of profits in any business. But if you look around you and ask yourself questions about the actual impact of some of the business organisations that post the highest profits, in terms of job creation and corporate social responsibility, you are bound to scratch your head in perplexity.

Without the government and the money, some of our blue chip companies (allegedly blue chip, that is) make you have a rather depressing picture before you. As going concerns, many of them do not have the strength of a feather. The government is the convenient crutches with which they have been sneaking past the finishing line, on the pretext that they are long distance runners. Look more closely and you may hit upon the conclusion that many of them are all ‘chip’ companies and no blue. They merely prey on a prostrate market with lax rules and governance paradigms, strutting about with badly inflated ideas about what they really are. But we are digressing from today’s business.

On April 17, 2012, this column took up a matter that was dominating the news outside the country at the time. It concerned Alhaji Aliko Dangote, when, according to the Financial Times, he was about to kick off the listing of “his $11 billion cement business on the London Stock Exchange … and loosen his control on the group”. The paper also gleefully announced that the businessman was about to free-float a 20 per cent stake in his cement firm. His is still the largest cement producer in sub-Saharan Africa. For good measure, as announced at the time, the company was doubling capacity that year, to 21 million metric tonnes. It was then said: “For the record, Dangote Cement has three plants in Nigeria and 70 per cent market. It also has contracts to build factories in eight African countries.”

Notwithstanding the controversies, and are many, regarding the Dangote business chain, the article in question was a celebratory reaction to the perceived dare-devilry of Dangote, who was able to get himself taken seriously in the serious world of global stock market. Part of the stunning news at the time was that the main conglomerate, Dangote Group, was simultaneously changing focus. The company was said to have resolved to concentrate on the three core areas of (1) food, (2) infrastructure (3) mining. It was also poised to sell some 80 per cent of its stake in its food chain (sugar, salt, flour, rice and pasta), at the time. There was also the news that the organisation wanted to quadruple its profits within for years. But that is Dangote and anyone can check up on that endeavour.

Then Ijeoma Nwogwugwu recently wrote in her column “Behind the Figures”: “History is about to be made in the oil and gas and financial services industries”, as she announced the simultaneous listing of the ordinary shares of Seplat Petroleum Development Company Plc, a fast-growing indigenous oil and gas company, on the London and Nigerian Stock Exchanges. She said, further, that Seplat would raise at least $500 million through the initial public offer (IPO) that would be used to fully repay its shareholders’ loan of $48 million to Maurel et Prom of France. According to her, “The balance of most of the net proceeds of the global offer would be utilised by Seplat for acquiring and developing new acquisitions of oil acreages, and/or pay down any additional debt raised in connection therewith of both onshore and shallow offshore acreages, assets or joint venture farm-ins.”

This is suggestive of not just credibility but pedigree and strategic positioning for global relevance on the part of Seplat. No company becomes a player in the global business environment because the government likes or dislikes it. It is an inclement environment, where no one gets piggy backed across tough terrains.  If anything, those who make it unto the platform must break out of the protection and restricting paradigms of particularistic national economies. For instance, the aforementioned article on this column noted that the core focus of the strategic footwork within the Dangote Group was to expand the economic space and create opportunities (not charities) for a mix of competent players. “These must be serious economic actors and commercial interests with the capacity to create and draw life lines, make contributions and widen the stakeholder platform”, as the Dangote Group was not looking for who to swindle, but was moving into “tougher business terrains with global, and stringent entry requirements.”

It is the same for Seplat, except that the latter has actually taken matters well beyond where Dangote is at the moment in the same market. The company is seen as capable of meeting the prime paradigms of international standards in its operations. The news out there is that Seplat has a most reassuring corporate governance structure, as well as a board of directors and management team that anyone would be proud of anywhere in the world. This is probably not surprising, because there is no other way the company would have survived six months of unmitigated scrutiny by the UK’s Financial Conduct Authority (FCA) and given the green light for the London listing.

We also heard this from Ijeoma that Seplat enjoys the rare distinction of being the first Nigerian company operating strictly in the upstream oil and gas sector that would be listed on the main board of the London Stock Exchange (LSE), as well as the Nigerian Stock Exchange (NSE). Hear her: “Another firm, Lekoil, is Nigerian but its shares are listed on the Alternative Investment Market (AIM), which is the LSE’s international market for smaller growing companies”. But no one was talking about these firms at the time of Dangote’s move. At the time Morgan Stanley and J.P Morgan were co-leads for the London entry, in a move that required Dangote to meet globally competitive corporate governance requirements for a premium listing. Dangote had the unusual mindset at the time of ceding the chairmanship of the board to what the Financial Times described at the time as “somebody else, a professional who is well respected within investment circles”. I hope he/she won’t be a ‘technocrat’, because business is global politics at a certain level”.

But back to Seplat! Its dual listing is seen by industry watchers as capable of opening the floodgates for a swing in the profile of actors within the NSE. Many oil and gas firms which the management of the NSE has been wooing for some time to get listed are likely to come on board. Ditto for “other sub-Saharan companies seeking to raise capital from international markets”, according to Behind the Figures. This is all rather exciting.

The stories of every big business with global impact always have several versions – both the revised standard and the unrevised, sub-standard versions. The part of it that interests us here is the capacity for resolute, daring investments and business adventure in a new world that has very stringent entry requirements. The essential point is that we may well be seeing a greater tendency on the part of Nigerian businesses towards business models that look far into the future; and with a lot of commendable realism.

Seplat has been in existence for just five years, but it has grown to become the largest indigenous independent operating firm in the local environment. The stature and credulity of its shareholders did a lot to drive its meteoric growth and quick dominance. It is all well and good, even commendable and perhaps something to really brag about. But, going forward, Seplat must focus on sustaining the gains, breaking even newer and more virgin grounds, driving CSR and remaining on course.

On the question of who next will make news by taking the global financial firmament by storm, we have no doubt that Adenuga may step forward.

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This article was first published on Thisday Newspapers

 

Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.