By Babajide Komolafe
Oando Plc yesterday announced the final settlement of a long standing shareholder dispute and the release of its operating results for full year 2019 and 2020.
According to a statement announcing this development, “In July 2021, Oando entered into a settlement with the Securities and Exchange Commission, SEC, on all matters subject to litigation and other issues flowing therefrom, thus putting an end to one part of the dispute with Ansbury. Key for Oando was that the SEC did not find the company guilty of any wrongdoing and by way of a settlement, was able to prevent further market disruption and harm to Oando PLC shareholders.
“After 12 consecutive quarters of profits up until Q3, 2019, the company reported in its 2019 audited financials a loss-after-tax of N207.1 billion largely attributable to impairments for goodwill and loans associated with the indirect shareholder dispute. The settlement of this long-running dispute led to an impairment of N148 billion on financial assets but forms the final resolution and settlement of the dispute with Ansbury, the indirect shareholder whose actions had significantly destroyed shareholder value over the last four years.
“With 2019 behind it, the company faced a new challenge in 2020 in the form of the COVID-19 pandemic which negatively affected all corporates not just those operating in the oil and gas sector. In the company’s 2020 Full Year End financials, a loss after tax of N132.6 billion, a 36% drop from 2019, was reported. A positive skew in results from the previous year.
Commenting on the 2020 results Wale Tinubu, Group Chief Executive, Oando PLC said: “2020 proved to be an unprecedented year for the global economy due to the impact of the novel COVID-19 pandemic. The Oil & Gas industry was no exception as the year turned out to be one of the most challenging years in its history as we witnessed the lowest oil prices since our sojourn into Nigeria’s upstream sector in 2008, thus negatively impacting our revenue during the period. “This resulted in us having to impair a portion of the goodwill on our balance sheet to ensure the carrying value of our assets was a true reflection of the environment we were operating in. Furthermore, the second tranche funding of the settlement of a protracted and disruptive shareholder issue resulted in us taking a further impairment on a category of our financial and non-financial assets. Despite these challenges, our hedging policy and long-term offtake contracts ensured our cash flows were not severely stressed during this period.”