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Oando set for N21.12bn Rights Issue

By Peter Egwuatu
Oando Plc, yesterday   concluded arrangement to raise a total of N21.118billion from its Rights Issue, with all the directors of the company, parties to the issue and regulatory bodies in the capital market endorsing the offer at a completion board meeting held in Lagos.

The Rights Issue is scheduled to open on Monday 25, January 2010 and to close on Friday, 19 February 2010.
The Rights Issue is meant for existing shareholders of the company and is to be distributed in the proportion of one for three; meaning one new ordinary share will be distributed to a shareholder who has three ordinary shares of 50 kobo each at a  price of N70 per share.

Speaking to newsmen after the completion board meeting, Group Managing Director, Oando Plc, Mr. Wale Tinubu said, “ The Rights Issue is very important for the company as it will help refinance the acquisition of upstream asset,  provide additional capital to fund the operation of the upstream business  and also short and medium term investments in its gas and power business segment.”

According to him, “The net Rights Issue proceeds is estimated at N20.437 billion after deducting the total cost of the Issue estimated at N681, 312 million, (representing 3.23 per cent of the Issue), will be applied as follows : Upstream Assets Refinancing N14.919 billion; Operational Capital Development and Upstream Business Development N3.883 billion; Technology N3.658 billion; People N225 million and Working capital N1.634 billion.”

While responding to question on the timing of the offering, he said, “ There is no better time than now. The offer is a good one coming from a viable company with very sound fundamentals. So our shareholders will surely take their rights because it is a juicy offer. We see the offering to be very successful. We have track record and the company is doing well. A good offer can sell any time. So we are confident that the Issue will be fully subscribed.”
Onado Plc has an authorised share capital of one billion comprising 2 billion ordinary shares of 50 kobo each with issued and fully paid up capital of N452,542,314 comprising 905,084,628 ordinary shares of 50 kobo each.

The company is presently offering 301,694 876 ordinary shares of 50 kobo each to its existing shareholders at N70 per share.

The company share is currently being traded at N93.99 per share at the stock market. This is the price at which the Nigerian Stock Exchange (NSE) placed technical suspension on the share when the company notified  it of its intention to float a Rights Issue. The implication is that the price of the share cannot move beyond N93.99 per share.

The technical suspension placed on the price of the share  is a normal practice adopted by the Exchange when any quoted company is coming out with any offer. The technical suspension is also meant to give investors equal opportunity and prevent  insider knowledge abuse.

Meanwhile, major parties to the Issue include: Vetiva Capital Market Limited as lead Issuing House and FCMB Capital Markets Limited and Stanbic IBTC Bank Plc as joint Issuing Houses.

First Registrars Nigeria Limited as registrar to the Issue; PriceWater HouseCoopers as Chartered Accountants; Vetiva Securities Limited, CSL Stockbrokers Limited, Stanbic IBTC Stockbrokers Limited as joint stockbrokers to the offer.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.