Seplat Petroleum Development Company Plc has issued 10.13 million ordinary shares of 50 kobo each, currently valued at about N2.33 billion, to kick off an employee incentive scheme that will ensure periodic distribution of the equities of the company to employees.
A total of 10.13 million ordinary shares of 50 kobo each have been added to the outstanding shares of Seplat on the Nigerian Stock Exchange (NSE), according to regulatory filing. The supplementary listing increased the total issued shares of Seplat to 563.44 million ordinary shares of 50 kobo each. The shares under the employee incentive scheme have equal rights, including voting and dividend rights, with the previous shares of the oil and gas company.
Seplat is listed on the NSE and the London Stock Exchange (LSE). Seplat’s share price opened on Monday at N230.04, putting the value of the incentive scheme’s shares at N2.33 billion and the company’s total market value at N129.6 billion.
With the listing, pre-qualified employees of the oil company that have been allocated incentive shares could trade on their shares, in line with the issuance rules of the scheme.
The “Employee Long-Term Incentive Plan” is the final phase of a two-part incentive scheme under which the six-year old company plans to reward directors and employees, especially those executives and directors that contributed to its hugely successful initial public offering (IPO).
After a highly successful global IPO of $500 million, Seplat had made history mid April 2014 as the first upstream company to be listed on the NSE. It also simultaneously listed its shares on the LSE. The initial offer size of the IPO was expected to raise gross proceeds of approximately $500 million, equivalent to £300.9 million and N82.5 billion. It was however oversubscribed. It subsequently increased its capital base by about N5.78 billion with the absorption of the oversubscription from the IPO by adding 10.03 million ordinary shares of 50 kobo each to its shares. The company attributed the additional shares to oversubscription and allotment that resulted from the IPO.
The Nation had earlier exclusively reported that Seplat Long Term Incentive Plan (LTIP) consisted broadly two components including share incentives related to the company’s successful global initial public offering and annual share bonus.
Under the global IPO bonus scheme, the company would issue bonus shares to directors and senior management staff at nominal cost to the company.
The company will issue ordinary shares to its executive directors and senior management as a reward for their contribution to achieving a successful global offer as stated in the prospectus dated April 9, 2014. A total of 7.75 million ordinary shares qualify as global offer bonus shares out of which 3.87 million shares vest immediately but will be held till 2015 and 3.873 million shares will vest after two years.
Also, the company will issue unspecified ordinary shares under its annual share incentive scheme. The annual bonus scheme is a performance-related deferred annual bonus award by reference to performance against objective performance targets during the previous financial year.
As part of the global offer bonus, Seplat will also issue shares to all non-executive directors, who have served on its board for at least nine months as at the date of the global offer. Under this incentive, the non-executive directors are eligible to subscribe to ordinary shares of the company with an equivalent value of 200,000 pounds based on the United Kingdom’s global offer share price at the nominal value of the shares based on the global offer share price.
According to the plan, the legal and beneficial ownership of the shares will vest in the non-executive directors from the subscription date, with a restriction on the sale of the shares, such that the directors cannot sell or encumber any of the shares until the first anniversary of the global offer at which point they may sell up to 50 per cent of the scheme shares while any of the remaining 50 per cent cannot be sold until after the second anniversary of the global offer.
The shares would be issued from the unissued shares of Seplat at nominal price and allotted to the employees and trustees at nominal price too.
Seplat had explained that the LTIP was approved and disclosed in the prospectus that was issued in April 2014 and the revision was made to the earlier approval in June 2014. The company stated that at its annual general meeting held in June 2014, shareholders approved the LTIP for the company’s staff.
According to the company, the LTIP is intended to increase the employee productivity, morale and loyalty by focusing their performance more on long-term goals by tying employee performance to rewards.
Seplat was founded in 2009 by Shebah Petroleum Development Company Limited and Platform Petroleum (Joint Ventures) Limited for the purpose of investing in Nigerian oil and gas opportunities. Maurel& Prom, a French independent oil company, subsequently acquired 45 per cent equity interest in SEPLAT; this interest was later spun-off to form Maurel & Prom Nigeria S.A, which is now known as Maurel & Prom International.
In July 2010, SEPLAT acquired a 45 per cent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil mining leases-OMLs 4, 38 and 41, which are located in the Niger Delta. In June 2013, the company entered into an agreement for the acquisition of a 40 per cent participating interest in the Umuseti/Igbuku marginal field area located within OPL 283 in the Niger Delta.