Shareholders approves Oando N80 Billion Rights Issue

Oando Plc Logo

Despite the huge losses that was declared by Oando Plc in its 2014 audited accounts, which was extended to 2015 financial as a result of provisioning by the company.

Shareholders at its 38th, Annual General Meeting in Lagos has approved the company board of directors request to raise N80 billion by way of right issue.

The board of directors also received shareholders approval for partial divestment of its midstream and upstream services businesses in order to attract substantial capital for the company growth initiatives.

Speaking on how the company intends to create value for shareholders going forward, the Group Chief Executive, Adewale Tinubu said: The sale of 60% of our downstream business is in line with our strategic goals of placing our fundamental growth expectations in the Upstream, and the cash proceeds of the divestment will be utilized towards debt reduction to shore up our balance sheet in these challenging times.

Our strategic focus is to increase our operational efficacy across our subsidiaries, deleverage our balance sheet, and return the company to profitability, whilst creating the necessary platform to be the partner of choice to the International Oil Companies (IOCs) as they continue their divestment programmes.

Mr Tinubu explained that with crude prices in a lull and a renewed emphasis on gas globally, Oando will seek to expand its footprint in the electric power market with the development of up to 300MW grid embedded power projects; development of up to 100mmscfd Compressed and Liquefied Natural Gas (CNG& mini LNG) projects to meet the energy requirements of Nigeria fast growing economy; build a 300mmscfd gas processing plant to ensure effective commercialisation and utilisation of Nigeria vast gas resources, and expansion of Oando gas pipeline grid to 300km.

In 2011, the company received shareholders approval to divest part of its downstream business which came to fruition in 2015 with the sale of 60 percent economic rights and 49 percent voting rights of the business to a joint venture consisting of Helios Investment Partners, and Vitol, for a total consideration of $461 Million.

The divestment according to Tinubu will reposition the company for a new era of investment growth and profitability, whilst enabling the Oando Group focus on its midstream and upstream ambitions.

- Advertisement -First Bank The Voice of Nigeria