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Otedola completes sale of Forte Oil as share price climbs up

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By Peter Egwuatu

Nigerian Billionaire, Femi Otedola has completed his divestment from Forte Oil Plc after receiving full payment for the sale of the company to Prudent Energy Services Ltd.

Femi Otedola

According to Nairametrics, an online platform, Otedola shared this on his Instagram Profile earlier Wednesday confirming a deal that has been in the work for months.

The share price of Forte Oil Plc has received a boost in the wake of the sale, closing at N34.65 per share at the Nigerian Stock Exchange yesterday up from its last week opening price of N25.75, signaling a rise of 34.6 per cent or N8.90 per share.

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This came barely one week after the Exchange endorsed the transfer of the 75 per cent majority equity stake in the company from its Chairman, Femi Otedola, to Prudent Energy and Services Limited in a share purchase deal.
Forte Oil had earlier notified the NSE of its principal shareholder’s intended divestment of his holding in the company, which was then expected to be consummated in first quarter, Q1 2019.
Prudent Energy will invest the 75 percent stake through Ignite Investments and Commodities Limited.

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Sefton Fross, a leading full-service indigenous law firm, is the advisor to the buyer while Stanbic IBTC Capital Limited and PriceWaterhouse Coopers are the Joint Financial Advisers.

The deal would see a total of 982.97 million ordinary shares of 50 kobo each change hands. It is said that each unit of the shares would be divested at N66.01 with a total value of N64.89 billion. The transaction price of N66.01 per cent represents about 90.5 per cent premium on Forte Oil’s opening share price at the NSE yesterday.

Otedola had held the shares through direct and indirect shareholdings, the latter in the names of Zenon Petroleum and Gas Company Limited and Thames Investment Incorporated.
On reasons for the divestment, Forte Oil has said that Otedola’s decision is premised on his desire to invest the proceeds in harnessing and maximising business opportunities in refining and petrochemicals.

Otedola had obtained the shareholders’ nod to divest the group’s upstream services and power generating businesses including downstream businesses in Ghana in a move aimed at concentrating Forte Oil’s operations on its Nigeria’s downstream marketing business.

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