Oando Plc has succeeded with its Rights Issue as the integrated oil company raised about N55.2 billion from existing shareholders. The company had issued 4.548 billion shares to existing shareholders at N12 per share between December 2012 and February 2013 with the intention of raising N54.6 billion.
The allotment approval by the Securities and Exchange Commission (SEC) made available at the weekend, showed that Oando succeeded in raising N55.2 billion, indicating the high level of investors’ confidence in the company.
For instance, details of the allotment showed that a total of 11,714 acceptances for 4,596,055,622 ordinary shares, valued at N55.153 billion were received in connection with the Rights Issue.
All 11,714 acceptances were found to be valid under the terms of the Rights Issue and were all processed, leading to a subscription of 101 levels.
The success of the Rights Issue did not come as a surprise to capital market stakeholders as market experts had said that by subscribing to the issue, shareholders were responding to a positive outlook based on strong market fundamentals.
“Oando is entering a new frontier in its integrated energy business model which will see the company increase investments in the upstream segment of the Oil& Gas space. In addition, the analyst believes “Oando is a low cost route into Nigeria’s attractive energy sector,” a market analyst said.
Also other analysts said Oando Plc had made investment in the high margin upstream division that will transform the business significantly and increase value creation for the shareholders.
The acquisition of ConocoPhillips’ entire oil and gas assets in Nigeria put the company on stead to increase its oil production to almost 50,000 barrels of oil per day. It also extends its footprint into the liquefied natural gas (LNG), as well as power generation. An initial $435 million deposit has been paid, the balance of $1.3 billion will be paid by the proceeds of the recently concluded Rights Issue whilst a syndicate of international banks have lined up to finance the $800 million debt portion of the transaction.
