Forte Oil (FO) Plc, a Nigerian indigenous Oil and Gas company, rose to the highest in almost six months Monday on plans by Femi Otedola, its majority shareholder, to fully divest from the company.
The stock rose by 9.84 percent to N31.25 per share at the close of trading in Lagos, its highest since June 29, 2018, according to data from the Nigerian Stock Exchange (NSE).
At the current price, Forte Oil is 40.61 percent below its 52-week high of N52.62 and 80.64 percent above its 52-week low of N17.30, while its year to date loss moderated to -34.57 percent.
Otedola, a Nigerian billionaire, plans to sell his “75% direct and indirect shareholdings in the company’s downstream business,” Forte said in a statement posted on the NSE website.
“Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximise business opportunities in refining and petrochemicals,” Forte explained.
The transaction is expected to be completed in the first quarter of 2019, subject to the satisfaction of various conditions and receipt of applicable regulatory approvals, it added.
Forte emerged the fifth-best performer on the NSE on Friday, December 21, after gaining 9.63 percent to close at N28.45 per share, its highest level since July 13, 2018.
The rally in the stock price began Tuesday, December 18 after the equity rose by 9.91 percent to close at N23.85 per share. The gain was sustained Wednesday when it appreciated by 9.85 percent to close at N26.20 per share but shed 0.95 percent at the close of trading on Thursday, December 20.
After the close of Monday’s trading session, the volume and value of shares traded in Forte Oil jumped 221.20 percent and 270.97 percent to 2.18 million units and N68.16 million from 679,910 units and N18.37 million recorded on Friday, December 21 respectively.
“Standard Chartered Bank, Corporate Finance & Advisory, Dubai and Olaniwun Ajayi LP served as Financial and Legal Advisors respectively to Femi Otedola, CON, while PricewaterhouseCoopers and Stanbic IBTC Capital Limited served as Joint Financial Advisors and Sefton Fross served as legal advisor to ignite Investments and Commodities Limited,” it further stated.
BusinessDay analysis of Forte Oil’s unaudited financial statement for the nine-month ended September 30, 2018 reveals that the Oil and Gas company grew its revenues by 38.37 percent to N94.92 billion from N68.03 billion recorded in the corresponding period of 2017.
Profit before tax stood at N78.73 million in the first nine months in 2018 as against a loss before tax of N626.06 million in the same period of 2017, while post-tax profits rose to N9.14 billion from N5.07 billion respectively.
OLUWASEGUN OLAKOYENIKAN & ISRAEL ODUBOLA
