Oando to raise $402 mln, sell subsidiaries

Nigeria’s Oando Plc plans to seek shareholders’ approval next month to raise funds of up to N80 billion ($402 million) through a rights issue and spin off its power and gas subsidiaries, the energy firm said.

Oando, with dual listings in Johannesburg and Toronto, will also seek approval on Dec. 7, to issue new shares in lieu of convertible debt owed to two shareholders.

Oando is pressing ahead with its growth plans, insisting that its pillars of strength remain unshaken by the negative balance sheet imposed on its 2014 financial results by the oil price slump.

In its Facts behind the Figures presented by the leaders of the company after posting a N184 billion loss in its recently released FYE 2014 financial statement, the company stated that the losses derived mainly from asset write downs and impairments, and not from cash losses.

Instead, the company said it is persistently driving its investment programmes, posting clear signals of speedy recovery after weathering impacts of huge investments, falling crude oil prices and the lull in the domestic industry environment.

The growth advances, according to the company, are driven across the group’s four major divisions that host strategic business units in the upstream, midstream and downstream ends of the industry. The divisions are represented by Oando Energy Resources (OER), Nigeria’s leading indigenous exploration and production company; Oando Energy Services (OES), an oilfield service provider and operators of Nigeria’s largest swamp rig fleet; Oando Gas & Power (OGP), the leading private sector gas developer and distributor; and Oando Downstream, the leading supplier, trader, and distributor of refined petroleum products in sub-Saharan Africa.

Oando had in 2014 sowed huge investments in transforming from a predominantly downstream company to a leading indigenous upstream player.

The company took an audacious step in acquiring all the Nigerian assets of American oil multinational firm, ConocoPhillips (COP) which was exiting the country’s worsening operating environment where pipeline vandalism and stringent fiscal outlook compelled anxiety.