Benue State government has been secretly selling its shares in Dangote Cement plc, earning more than N6 billion from the sale, documents including CSCL reports sighted by BusinessDay have revealed.
According to documents seen by our reporters, a key Benue State government agency, through Elixir Investment Partners, a fund management and advisory firm, offloaded 29.19 million units of shares valued at N6.40 billion.
However, it is unclear if the proceeds from the shady sale have all gone into the coffers of the state government, especially because officials of the state government have consistently denied that any such sale of shares has taken place.
Governor Gabriel Suswam has categorically denied that the state’s holding in Dangote Cement was ever put on the market, but leading stockbrokers who spoke to BusinessDay have rubbished the governor’s position, offering concrete evidence to confirm the very many transactions involving Benue State government shares in Dangote Cement.
They also question the actual number of shares originally held by the state government and this will certainly give more ammunition to opposition politicians in the state who have accused the governor of mortgaging the future of the state to finance the upcoming elections.
The shares were originally held in trust for the indigenes of the state and warehoused or held in custody by Benue Investment Property Company (BIPC).
According to the sale reports, on Tuesday, September 2, 2014, Elixir, working on the instructions of the government, offloaded a significant amount of shares in 16 transactions which involved the sale of 6,152,127 units of shares earning a whopping N1.35 billion in that single transaction.
Elixir returned to the market on Wednesday, September 17, when it concluded 11 transactions involving the sale of Dangote Cement shares held by Benue State government, and again the next day when 29 sale transactions were concluded.
Similar transactions were conducted on September 19, September 22 and September 23, and the biggest single transaction was concluded on Wednesday, September 24 when in one transaction alone, over nine million units of shares were sold for N2.19 billion.
The document revealed that a total of 29,192,297 units of shares were sold, with the last recorded sale happening on Friday, September 26, 2014.
The implication, according to the analysts, is that the state government may be aiming to divest its entire investment in the largest cement company in sub-Saharan Africa.
Some industry analysts interviewed by BusinessDay, who do not want their names mentioned because of the sensitive nature of the issue, said Benue State finances have been under severe stress, as is the case with a number of states in the country.
However, while some of the stockbrokers admit that the sale could help to shore up the finances of the state, they are uncomfortable with the manner of the transactions.
This is so as they claim that the timing is suspicious, considering the fact that the cement giant is expanding aggressively across the continent with the possible enhancement of returns on shareholders’ investment.
In 2010, Dangote Cement plc, owned by Aliko Dangote, bought majority shares in Benue Cement Company (BCC).
With production capacity totalling 20.3 million tonnes across three Nigerian plants, the company has a strategy to expand into 13 other nations in Africa, bringing total capacity to more than 60 million tonnes by 2016.
Dangote Cement share price closed N212 on the floor of the Nigerian Stock Exchange (NSE) as at close of trading on Friday, while market capitalisation was N3.61 trillion.