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Blackwells Capital Sends Letter to the Board of Directors of IHS Holding Limited Regarding the Immediate Need for Governance Enhancements
JULY 7, 2023 BY BN AFRICA

Believes the First Step Toward Fixing Disclosure Issues, Governance Failings and Value-Destructive Strategic Lapses is Reconstituting the Board

Calls on the Company to Disclose Any Proposals Submitted by MTN, Wendel or Other Shareholders in Connection with 2023 Annual Meeting

Notes That Blackwells’ Private Letter to Board From August of 2022 Was Met With Inaction

June 28, 2023 07:00 AM Eastern Daylight Time

Blackwells Capital LLC (together with its affiliates, “Blackwells”), a long-term shareholder of IHS Holding Limited (NYSE: IHS) (“IHS Towers” or the “Company”), today announced that it has sent a follow-up letter to the Company’s Board of Directors (the “Board”).

The full text of the letter follows:

***

June 28, 2023

Via E-Mail and Federal Express
The Members of the Board of Directors
IHS Holding Limited
1 Cathedral Piazza
123 Victoria Street
London SW1E 5BP
United Kingdom
Attn: Mustafa Tharoo
Executive Vice President and General Counsel

IHS Towers
152 West 57th Street
New York NY, 10019
Attn: Colby Synesael
Executive Vice President of Communications

To the Members of the Board of Directors:

Blackwells Capital LLC (“Blackwells”) is a significant, long-term shareholder of IHS Holding Limited (“IHS” or the “Company”). As you are aware from prior discussions, we have expertise in the telecommunications industry and related infrastructure, as well as a demonstrated track record of helping companies to enact value-enhancing change. Unfortunately, we have suffered a substantial diminution in the value of our investment as IHS shares have fallen by a staggering 60% since the Company’s initial public offering (“IPO”) in October 2021.

In this letter, we detail numerous disclosure issues, governance failings and strategic lapses that have contributed to value destruction at IHS. We believe, that among other actions, the IHS Board of Directors (the “Board”) needs to be reconstituted as a precursor to necessary changes at the Company. Blackwells will take all necessary steps to overhaul the current Board in the event the status quo persists.

After relying on unaudited quarterly financial statements for the second quarter of 2021—financial statements that suggested a clear up-and-to-the-right trajectory as the Company was going public—the Company thereafter retreated from substantial reported profits to staggering, and increasing, losses. In August 2022, the Company released its appalling Second Quarter 2022 (“Q2 2022”) earnings report, which sent the IHS stock price down by more than 14% in the two trading days following the release. At that time, we wrote a letter to the Board expressing concerns about significant operational, management, and general governance issues that appeared to be plaguing the Company, and offered assistance with trying to remedy some of those issues. I spoke with Mr. Darwish following that letter. Ultimately, however, neither the Board nor management formally responded to us. More importantly, neither the Board nor management substantively addressed any of Blackwells’ concerns or apparently considered seriously any of Blackwells’ suggestions for improvement.

It is apparent from the Company’s earnings releases since Blackwells’ August 2022 letter that management has no serious focus on enhancing value for the Company’s shareholders. Although revenue increased overall in 2022, the Company’s reported loss for the year increased 18-fold, from $26.1 million in 2021 to $470.4 million in 2022—a $1.39 loss per share for shareholders for 2022. And while the Company at one level appears to be generating positive cash flow from operations, the news is far from positive; the Company continues to be so highly capital-intensive that it required hundreds of millions of dollars last year alone to finance new investments. The Company used more than $1.5 billion in cash last year for investing activities, but the line items on the Company’s published Statement of Cash Flows for such investing activities are not explained in any meaningful way to permit shareholders to understand these cash uses. Moreover, the capital needs are being met almost exclusively through new borrowings—borrowings that are, in the current environment, a tremendous overhang. This is in part because the Company’s stock price renders meaningful, non-dilutive capital infusion through the sale of new equity essentially impossible. As Blackwells previously identified in its August 2022 letter, the Company’s aggregate debt level continues to grow—and has now increased to nearly $3.5 billion, more than 60% or $1.3 billion greater than total debt at the time of the IPO—despite repeated Company assertions in its public filings that it had sufficient liquidity for future periods.

The Company uses a non-standard metric, what it terms Recurring Levered Free Cash Flow (“RLFCF”), “to measure the free cash flows [it] has generated from operations, after accounting for the cash cost of funding and recurring capital expenditure required to generate those cash flows.” The Company calls RLFCF “useful to investors because it is also used by [Company] management for measuring [its] operating performance, profitability and allocating resources.” But under even this bizarre measure, RLFCF has decreased by more than 10%, from $406.2 million in 2021 to $363.3 million in 2022, despite a substantial increase in the business as measured by revenue and a reported increase in cash generated from operations. No rational manager or corporate director can view this as positive – it is the veritable antithesis of economy of scale. Not surprisingly, as interest rates have rapidly escalated in the past year, the Company attributes the decrease in RLFCF in part to an increase in “net interest paid” (along with increased income taxes and maintenance capital expenditures). But the increase in interest rates, particularly when coupled with another half-billion dollar increase last year in the principal balance of outstanding debt, promises to serve as an anchor tethered to the back of the ship for some time to come, absent serious corrective action. And while the Company’s supposed primary plan for increasing shareholder value is (and has been) for it to increase the colocation rates on the towers it already owns, because it can be achieved at “a relatively low capital expense” (and, by extension, debt), the Company’s execution of this strategy leaves much to be desired. The colocation rate of the Company’s tower portfolio has declined each fiscal year from 2020 to 2022. And even when accounting for tower acquisitions from other mobile operators that typically have a low colocation rate (such that the Company’s overall colocation rate might be expected to decline somewhat), the colocation rate has barely changed in the reporting periods since the Company’s latest acquisition of MTN’s South Africa towers in Q2 2022.

These are among the metrics that Blackwells can actually see or infer from the Company’s public filings. By themselves, they are a source of great concern about the focus and capability of the Company’s management team and Board. But Blackwells is seriously concerned that there is a good deal more bad news; as conveyed in its August 2022 letter, the Company’s disclosure record reflects a serious lack of transparency. One need look no further than the way the Company has performed since its IPO. The Company’s performance since its IPO does not remotely approach the implied financial performance from the Company’s IPO Prospectus. But more generally, many of the Company’s disclosures are opaque and simply fall short of what shareholders expect as good corporate governance.

Indeed, despite Mr. Darwish’s assertions accompanying the quarterly earnings releases that Company performance has been strong and that he was “pleased with how [IHS] performed in 2022 and the direction [the] business is heading,” the stock price remains unacceptably low. The market either does not believe, or cannot understand, the basis for Mr. Darwish’s bullish pronouncements. After the disastrous Q2 2022 earnings release, the stock price continued to fall until hitting a low closing price of $5.09 in October 2022—an astonishing 75% loss in value from the stock’s IPO opening price of $21. It thus appears that management and the Board either do not care, or have just refused to consider meaningful changes that could restore some of the shareholder value that has been eroded.

Blackwells suggests that the stock price remains low in substantial part because the Company refuses to embrace transparency with investors and corporate governance standards that more align with the norms of companies listed for trading on U.S. securities markets. We infer that Blackwells is not alone. Through recent press reports, Blackwells has learned that two of the Company’s largest shareholders, MTN Group Ltd. (“MTN”) and Wendel SE (“Wendel”), have put forward proposals that would enable shareholders with at least a 10% stake in the Company to seek Board representation. The proposals suggest that even some of the Company’s most substantial shareholders are concerned that the Company does not adhere to basic corporate governance norms. And that suggestion is confirmed by the astonishing fact that, according to press reports, the Board dismissed the MTN and Wendel demands to put their proposals to a vote at its recent annual meeting.

It speaks volumes about where IHS and its Board stand on corporate governance and basic shareholder rights that shareholders with this large ownership interest are rebuffed in a manner even more dismissive than the brush-off Blackwells received last year. Given the ownership position of MTN and Wendel, Blackwells infers that these shareholders did not raise their proposal concerning Board representation for the first time at the annual meeting. It strains credulity to suggest that the proposals (and no doubt other matters that these significant owners raised with management) were not fully vetted before the annual meeting; yet the Board refused to put the proposals to a vote. Indeed, it appears that IHS management failed to give notice of these shareholders’ proposed resolutions, despite provisions in the IHS Shareholders Agreement that seem to require the Company to notify all shareholders of additional agenda items subject to shareholder vote within five days of receiving notice of the agenda items from two or more of the shareholders subject to the Agreement—shareholders parties to the Agreement that include MTN and Wendel. And the predictable result: MTN has announced that it is “evaluating its options” with the intention of fully enforcing its rights under the Shareholders Agreement and the Company’s Articles of Association. Yet rather than engage with MTN, the Company is now reportedly preparing to defend against a hostile takeover—an effort that promises only to divert management and the Board further from responding to the Company’s apparent financial and operational problems.

It is clear that the Board and management rejected the MTN and Wendel proposals consistent with its approach, in place since at least the IPO, that meaningful engagement with and transparency to shareholders somehow constitutes an evil that the Company must combat. It seems that the Board and management are determined to ignore the will of an increasingly large segment of the IHS shareholder population, and to avoid the responsibility and accountability that attend the common governance principles with which investors in U.S.-listed companies are familiar. What management and the Board are missing, in addition to their exclusion of the very possibility that an idea from outside the C-suite might actually have merit, is that the overhang of the Board and management’s approach, enabled by maintaining IHS as a Cayman Islands company that extends few if any rights to non-insider shareholders, is seriously depressing the Company’s enterprise value. It is time that this stop. The Company would obviously benefit from greater alignment of Company operations with shareholder interests and from increased transparency.

continue reading:

https://www.bnafrica.com/blackwells-capital-sends-letter-to-the-board-of-directors-of-ihs-holding-limited-regarding-the-immediate-need-for-governance-enhancements/

How the EFCC abandoned its case against former Heritage Bank chief Ifie Sekibo
AUGUST 28, 2023 BY BN AFRICA

Five years after filing a criminal case against Heritage Bank’s former chief executive Ifie Sekibo, the Economic and Financial Crimes Commission seems to have clandestinely abandoned the case.

The criminal complaint caused shockwaves within the banking sector after the EFCC announced the charges it had filed against the Rivers-born banker.

The agency was led at that time by Ibrahim Magu, who would later suffer a spectacular fall from grace after he was accused of graft and pocketing bribes to "kill" cases.

Interestingly, Mr Magu’s temporary and permanent successors have not deemed it fit to provide an update on the status of the criminal complaint filed against Mr Sekibo.

In 2018, the anti-corruption agency had charged the Managing Director of Heritage Bank, Ifiesimama Sekibo, before a Federal High Court in Lagos for allegedly perpetrating a fraud in the sum of N605,321,051.05.

Joined with Sekibo in the charge sheet marked FHC/C/95C/18 was Kolapo Kola Daisi and a company, Greame Properties Limited.

The EFCC, in the first count, alleged that Sekibo, on July 29, 2016, “while being a bank employee, to wit: Managing Director of Heritage Bank, acquired the sum of N180m beyond your legitimate income through Greame Properties Limited, a company owned by you.”

The EFCC prosecutor, Ekene Iheanacho, who signed the charge sheet, said the bank chief violated Section 7(1) of the Bank Employees, Etc (Declaration of Assets) Act, Cap B1, Laws of the Federation of Nigeria 2004 and he is liable to be punished under Section 7(2) of the same Act.

Continue reading here:

https://www.bnafrica.com/how-the-efcc-abandoned-its-case-against-former-heritage-bank-chief-ifie-sekibo/

EFCC arrests five over forgery of government documents
AUGUST 28, 2023 BY BN AFRICA

The Economic and Financial Crimes Commission, EFCC, on August 24, 2023 arrested five people for allegedly using forged letterheads of the Offices of the National Security Adviser and the Attorney General of the Federation and Minister of Justice to fraudulently obtain money from unsuspecting members of the public.

The suspects are Mr. Yakubu Hamza Mohammed, Mr. Bashir Ladan, Mr. Adamu Ibrahim, Mr. Steven Anom and Mr. Mohammed Bello.

They allegedly conspired and used the letterheads to produce fake employment and recommendation letters for a fee, to unsuspecting members of the public.

https://www.bnafrica.com/efcc-arrests-five-over-forgery-of-government-documents/

Nigeria's largest retail bank, Access Holdings, has inked a deal with global financial giant Standard Chartered to purchase some of the British bank's Africa units.

Standard Chartered announced last year that it was exploring a sale of some of its businesses in Africa.

Read the rest of the story here:

https://www.bnafrica.com/standard-chartered-agrees-to-sell-sub-saharan-units-to-access-holdings/

United Nations Secretary-General António Guterres today formalized his prior announcement that Ms. Amina J. Mohammed of Nigeria will continue in her role as Deputy Secretary-General during his second term.

In delegating development coordination to the Deputy Secretary-General, the Secretary-General set in motion the most ambitious reform in the history of the UN development system. Ms. Mohammed’s leadership helped advance the conceptual shift from the UN that Member States called for in adopting the Sustainable Development Goals (SDGs). Over the last five years, the UN Sustainable Development Group was strengthened to enhance global leadership and oversight for development and the UN established a strengthened UN Resident Coordinator system as the foundation of a more effective development system.

The Secretary-General expressed his appreciation for the Deputy Secretary-General’s leadership of the UN Sustainable Development Group and her determination to reinforce collective results and maximize the impact of the UN development’s system on the ground. From our robust response to the socio-economic effects of the COVID-19 crisis; through a boost in climate action and unprecedented momentum for Financing for Development; to her strong emphasis on coherence across humanitarian, political and development action – her role was instrumental in keeping the SDGs alive at country level and protecting the Paris Agreement, despite significant headwinds.

Read more:



https://lagostimes.com/un-reappoints-amina-mohammed-as-deputy-secretary-general/

The Department of State Services (DSS) had charged suspects eight suspects – seven men and one woman to court for allegedly printing fake local and foreign currencies.

The Abuja Gwagwalada Chief Magistrates’ Court on Thursday ordered their remand in Suleja Correctional Centre for allegedly printing counterfeit notes valued at N98 million and US$1,487,700.

The suspects whose names were given as; Musa Mayo, Bala Jatau, Ibrahim Dangana, Luka Daniel, Nnemeka Ude, Asebe Zainab, Sani Muhammed and Abdulkarim Ahmed are being tried on a two-count charge bordering on forgery.

READ MORE HERE:

https://lagostimes.com/2021/09/02/dss-arraigns-eight-for-printing-fake-n98m-1-4m-notes-in-abuja/