By PETER EGWUATU
The Securities and Exchange Commission, SEC, has approved Oando Plc’s N30.7 billion fund raising through a special placement exercise.
Oando received the approval from SEC following the completion board meeting held recently where directors of the company and other parties to the issue endorsed the proposal to issue 2.5 billion ordinary shares of 50 Kobo each at N15.00 per share. The shares were fully subscribed to.
Out of the total amount (N30.7 billion) raised, N19.3 billion of the funds will be allocated to reducing the outstanding balance of Oando’s ongoing $1.6 billion acquisition of ConocoPhillips’ Nigerian assets, which has a scheduled completion date of January 31, 2014.
Commenting on the placement exercise, Mr. Wale Tinubu, Group Chief Executive, Oando Plc, said, “This represents another key milestone in the achievement of our overall strategic re-focus. A significant portion of the proceeds will be used to finance the closure of our upstream asset acquisition process; a transaction we believe will transform us into a major indigenous producer of oil in Nigeria.
The inherent value to our esteemed shareholders is evident, as we look to grow our asset base and income streams, whilst at the same time enlarging the portion of revenue we are able to declare as profits, through the increased margins the upstream business offers us.
We are excited about the future in store for our company, as 2014 will witness the culmination of all our efforts over the past 12 months, as we begin to reap the dividends of a carefully planned and executed strategy.”
The capital raising effort is a firm indicator of Oando’s short term corporate and operational strategy to vastly increase its equity portfolio through a three-pronged approach to reduce debt, improve diversification in upstream, and focus on higher margins.