Oando Announces $550m Participation in NNPCL’s Crude Oil Deal with Afreximbank

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Oando PLC closed the past week with two big ones. In a recent statement the indigenous energy company announced it was a party to the Project Gazelle financing deal, by contributing US$550 million to the total disbursed amount of US$925 million.

Arranged and coordinated by Afreximbank, the accordion arrangement saw the raising of a
combined total of US$925 million from a consortium of crude oil off-taker lenders including the Oando Group, Sahara Energy, amongst other energy companies.

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This brings the total funded facility size for Project Gazelle to US$3.175 billion. Project Gazelle is a US$3.3 billion structured crude oil-backed forward-sale finance facility
sponsored by the Nigerian National Petroleum Corporation Limited (NNPCL).

This unique financing arrangement backed by a crude oil allocation from the royalties and tax entitlements of the Nigerian Government is a first of its kind in Africa’s largest economy. It is designed to enable the much-required forex injection into Nigeria’s economy helping the Government meet its immediate obligations, enabling investments in critical projects to boost production and in turn, generating increased revenues; part of which would be used in paying off the facility over a 5-year period.

Speaking on Oando’s participation, Wale Tinubu, Group Chief Executive, Oando PLC said ” The successful completion of this facility signifies another win for the company and the country at large. The transaction further reinforces Oando’s ability to create value and the Company’s status as the indigenous partner of choice in Nigeria. As a proudly indigenous company our ambition has always been to use our platform to support the sustainable development of the nation. Against this backdrop, Project Gazelle will be instrumental in realizing the Federal Government’s efforts to boost the country’s socio-economic indices. Afreximbank as lead arranger continues to support African corporations – public and private growing confidence in the market and continent.”

One of the key reasons given for the novel Project Gazelle was its ability to avail the Federal Government in the immediate to medium term with access to the funding for investments in critical sectors that will help in reversing some negative economic indices and trends, whilst positively impacting the lives of its citizens.

In a joint statement with Afreximbank, NNPCL’S Group CEO, Mele Kyari commended the bank’s Management and team for their investment philosophy and active interest in co-creation of prosperity. “The successful disbursement of the first accordion under Project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPCL and Nigeria’s growth aspirations.”

He further assured Afreximbank and all investing communities of NNPCL’s resolve to continue to grow the nation’s hydrocarbon resources and strengthen its partnerships across the oil and gas value chain locally, and globally.

Commenting on the disbursement, Prof. Benedict Oramah, President & Chairman of the Board of Directors, Afreximbank, said: “The milestone achieved thus far, on this facility, demonstrates the Bank’s capabilities in performing its role as a crucial development partner for Africa. It reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability. This funding will greatly support the attainment of Nigeria’s short and longterm economic development priorities.”

Prof. Oramah described the original facility as ‘a landmark’ for being the largest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised in Africa, adding that the closure of the first accordion demonstrated the existence of positive market appetite for well structured commodities-backed instruments.

In its second win for the week, Oando announced the lifting of the suspension of the company’s secondary securities listing on the Johannesburg Stock Exchange (JSE). After a two-month suspension the JSE’s recent action means investors in South Africa are now able to trade in Oando’s securities on the country’s exchange.

Furthermore, Oando saw a positive swing in its NGX share price appreciating by 52.8% between April 28 to June 6, 2024. A period that saw the company release its audited FYE2022 results and shortly after at the end of May, its interim FYE2023 results. Investors have showed a strong and positive response to the release of the company’s 2023 unaudited financial reports which showed a major recovery for the indigenous energy company. Oando’s FYE2023 interim report showed a 71% increase in turnover from N1.9 trillion in 2022 to N3.4 trillion in 2023 as well as a Profit after Tax position of N74.7billion, a 192% increase from the preceding year. After recent upheavals, it looks like exciting times are ahead for Oando, its shareholders, the investing public and the Nigerian economy.

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