Shareholders of Nigerian Oil and Gas Company Forte Oil (FO) have given a nod to the proposal of the Board of Directors for its power generating businesses in Nigeria to be made available for acquisition by Nigeria’s billionaire businessman Femi Otedola.
The approval was given by the shareholders at the Extra-ordinary General Meeting (EGM) of the firm held in Lagos.
The decisions which were arrived at by voting saw 90.9 percent of the shareholders approve that the company may enter into discussion with Femi Otedola or any other company representing him in connection with the assets to be divested although subject to an independent valuation on fair value, and enter into subsequent binding agreements on comparable arms-length/commercial terms in relation to the assets to be divested.
Also, 90 percent of the shareholders agreed that the directors or management of the company are authorized to execute all documents, appoint professional parties and advisers where necessary in connection with the resolutions of the board which must comply with the directives of regulatory authorities.
Over 90 percent of the shareholders also permitted the company to take all steps to give effect to these resolutions and, where applicable, to file and/or register same with the Corporate Affairs Commission (CAC).
Femi Otedola’s indirect holdings, namely, Zenon Petroleum and Gas Limited and Thames Investment Limited, are excluded from voting at the EGM in compliance with the requirements of the Nigeria Stock Exchange (NSE) Rules Relating to Board Meetings and General Meetings of Issuers.
A look at directors’ interests as at December 31, 2017 shows that Femi Otedola directly holds 186,260,357 units in Forte Oil plc while indirectly he holds 838,472,441 units.
Forte Oil plc is listed on Petroleum and Petroleum Product subsector of the NSE Oil and Gas sector. It has 1,302,481,103 outstanding shares and market capitalisation of N34.5 billion.
Forte Oil plc downstream business recorded a turnover of N74 billion in the financial year ended December 31, 2017, representing 38 percent decrease compared to N120.1 billion recorded in 2016. In the financial year, Forte Oil plc reported 13 percent decline in revenue to N129.4 billion as against N148.6 billion in 2016 financial year. The year in review was very challenging for Forte Oil Downstream Business with reduced product supply owing to foreign exchange scarcity and volatility, the company had said.
Forte Oil plc said the decision to divest from upstream services and power-generating businesses will boost its distributable earnings for the benefit of shareholders.
Forte Oil plc had in December last year notified NSE and the investing public that Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximize business opportunities in refining and petrochemicals. The transaction is expected to be consummated in this first-quarter (Q1) of 2019 subject to the satisfaction of various conditions and receipt of applicable regulatory approvals.
