By Providence Obuh
Acorn Petroleum Plc is set to raise N5 billion through private placement following an approval of the basis of allotment of its Rights Issue by the Securities and Exchange Commission, SEC. The company has during its last AGM obtained approval from its shareholders to raise additional equity by way of Rights to existing shareholders and placement with new investors.
In a statement, the company said that capital raising exercise represents a significant milestone in its re-capitalization process and that it has commenced the second phase of the capital raising exercise which will be a combination of Special/Private Placement to selected investors during which the company hopes to raise additional N5billion in new equity. The company hinted that approval was obtained at its last AGM from shareholders to raise additional equity by way of Rights to existing shareholders and placement with new investors.
Accordingly, the company said, “we will focus on the core downstream activities of distribution of petroleum products hence capital raised will be deployed towards corporate restructuring, working capital and investment in critical infrastructures like construction of storage depots at Lagos, Port Harcourt and Abuja airports, construction of a lubricants blending plant, expansion of its retail outlets chain, LPG Plants and the development of an ultra-modern oil terminal.”
As part of its strategic plans to give liquidity and exit options to shareholders, the company has commenced the process of listing its existing shares with NASD via listing by introduction and this is expected to be concluded in December 2015. Meanwhile, the company also debunked rumors about the reported sale of its assets by AMCON, “we do not have any assets encumbered by AMCON.
During 2013, we entered into an agreement with AMCON wherein one of our assets was sold to AMCON in full and final payment of indebtedness. “This asset was in turn leased back to the company for a period of time with an option to buy back if the company desires. So it is erroneous to report that the company asset was put up for sale when in actual fact the asset in question does not belong to the company and not carried in its books. The company is not in dispute with AMCON and the company has the right of first refusal to buy back the facility which the company may decide to exercise if it so desires,” the company said.