Three Nigerian Banks break into Forbes List of World Biggest Companies

The year 2009 is rather an unlikely year for any Nigerian company… continues here.

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World’s Richest List: Why Mike Adenuga, Jimoh Ibrahim didn’t make it

In a direct confirmation of Fortune&Class Weekly news report of last week, the Forbes magazine, the United States of America’s compiler of the annual list of the world’s richest, Mr. Femi Otedola, Chief Executive Officer of Zenon Oil and Gas and largest shareholder of African Petroleum joined Alhaji Aliko Dangote on the world’s richest […]

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2009 Forbes Profile of Billionaires: Femi Otedola joins Dangote on World’d Richest List

Femi Otedola(l), Aliko Dangote(r)

Femi Otedola(l), Aliko Dangote(r)

Nigeria may have the honour of having two of its citizens listed in the 2009 edition of the annual Forbes list of the world richest. Fortune&Class Weekly can report that Mr. Femi Otedola, Chairman of African Petroleum Plc and Zenon Oil and Gas would join Alhaji Aliko Dangote, the first Nigerian on the list […] Continue reading here.

Heavy Debt Burden: Banks suspend funding for Dangote’s cement project

A heavy debt burden and the anticipation of high profile competition for the share of the Nigerian cement supply side from Femi Otedola may have compelled Alhaji Aliko Dangote to call off investments with intent to expand production lines in his many cement manufacturing plants and to build new ones. Sources in the banking industry indicated that some bank’s exposure to Dangote have become quite high and more discomfiting for the banks in consideration of hurdles they would have to contend with in the effort to get the debt repaid.

Though Forbes Magazine had listed Dangote as the richest man in Nigeria in 2007, financial sector source said his total debt folio drawn from various Nigerian banks may add up to N622billion. According to the source, about N300billion was secured from a bank by Dangote to play in the stock market between February and March 2008 when prices of stocks were at their peak.

“Prices of stocks started falling soon after the investment in the stock market and the fall in prices have become protracted which has resulted in stock prices sliding to historic lows. This, apparently, has affected the repayment traction of Dangote and this had added to the depressing situation of the banks that gave out the fund,” the source explained.

According to the source, Dangote also secured a N75billion loan for Obajana Cement and N240billion for his cement production plant in Ibeshe while also funding his Alheri Engineering, the company that won the 3-G GSM licence and will manage the GSM telephony service provider in the Dangote group.

Dangote’s decision to beat a retreat from cement manufacturing besides Nigerian banks refusing to make their money available for his use, is the wholesale opening up of the supply side of cement through the cement importation scheme of the Federal Government.

Dangote had enjoyed near monopoly status on the supply side of cement in Nigeria, and not a few aspiring builders had protested persistent increase in the price of cement which got to a high of N1,800 mid 2008. The Federal Government under Alhaji Umar Musa Yar’Adua removed the protectionist policy of the Olusegun Obasanjo’s presidency which banned the importation of cement into the country and closed down some other Nigerian cement producing companies ostensibly to protect the manufacturing essence of Dangote Cement production subsidiaries and the other players in the sector.

“This did not help price at all, because just a few producers can come together to determine the price of a bag of cement,” an industry player told FORTUNE&CLASS Weekly.

The Federal Government’s bid to beat down the price of cement by flooding the market with imported brands may have started impacting the market as the price of a bag of cement has come down to about N1,500 even as the imported brands are yet to fully land in the country.

Industry buzz, however, suggests that Dangote may also be worried with the licence granted Femi Otedola by the Federal Government to import two million tonnes of cement into the country as part of the effort to crash cement prices.

“The Federal Government had to consciously look out for a Nigerian business that has enough cash to back up the importation. It would not make sense to allow for importation of cement when you don’t have high profile business people that can mobilize enough funds to flood the market in the shortest possible time. That is why I think the Federal Government gave Otedola the licence to be involved in the importation of cement and I think he has a commitment to the Federal Government to sell at very cheap rate to Nigerians,” a source in the Presidency said.

DANGOTE, YAR’ADUA FALL APART OVER ECONOMIC EMPOWERMENT…MOVES TO ATIKU’s CAMP

The chummy relationship between Nigeria’s President, Umar Musa Yar’Adua and businessman, Alhaji Aliko Dangote may have hit the rocks, a source has said.

The source confided that though the President appreciates the support Dangote provided him while running for the office of the nation’s presidency but differences in matters relating to economic empowerment of Nigerians may have turned the president against the businessman profiled by American based Forbes Magazine to be the richest man in Nigeria in 2007.

“You know the president is a socialist by orientation, and I can tell you that despite the complains of some people that the president is not moving at a fast pace to provide the dividends of democracy to Nigerians, the president, in fact, has been doing battle with some of his friends in industry and business circle to make the provision of basic needs of existence affordable for Nigerians.” The source revealed.

“I think it is on this point that the president and Dangote departed. The President wants Dangote to use his influence to do things that will impact the lives of Nigerians but I think Dangote’s business considerations did not conform to the president’s vision.”

Other sources in the political circuit confided that as a result of this fall out with the president, Dangote might have moved camp to the side of former vice president Atiku Abubakar.

“It’s like taking a strategic position for 2011 which for politicians is around the corner. Since Dangote lost favour with the President he has moved his support to Atiku, the thinking in political circle is that Atiku is going to run again in 2011 and since for top level business people influential links and connection to government is an important factor in their business survival, Dangote may have opted to back Atiku for 2011, at least, to be able to find his way back into the corridor of power.”

All efforts made to speak with Dangote’s spoke person were not successful.