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Tag: Oando

  • Oando records N4b net profit in three months

    Oando records N4b net profit in three months

    Oando Plc at the weekend released its much-awaited operational reports and audited financial statements, indicating that the leading indigenous energy group recorded a net profit of N4.1 billion in the first three months of this year.

    The three-month report for the period ended March 31, 2016 raised hopes on the prospects of the energy group in the current business year, after global and domestic headwinds left the company in the red in the previous two years. Oando also released its full-year audited report and accounts for the year ended December 31, 2015.

    Oando’s share price rose by 2.92 per cent on the release of the results on Friday, the fourth highest gain in a trading session that saw average decline of 0.99 per cent at the stock market.

    Oando had sought and received regulatory waiver to submit its results behind the initial deadline due to an exhaustive audit by the group external auditors, Ernst & Young.

    The report indicated that Oando bounced back to profitability with net profit of N4.1 billion in first quarter 2016 as against net loss of about N20.9 billion in comparable period of 2015. However, turnover decreased by 34 per cent to N64 billion in first quarter 2016 as against N97.1 billion recorded in corresponding period of 2015.

    Global crude pricing fluctuation has changed the corporate landscape for oil companies, and has had far-reaching economic implications on Oando and many other indigenous firms in the industry.

    Group chief executive, Oando Plc, Mr. Wale Tinubu, said the first quarter performance demonstrated the group’s dedication to return to profitability by the end of the 2016.

    “We have implemented constructive corporate initiatives which are driving forces for our business in this new global reality of economic restraint and lower oil prices in our industry. The successful and ongoing implementation of these initiatives reiterates our strategy of growth, deleverage and a return to profitability by the end of 2016. As a group, we have placed our focus on growing our upstream higher margined business while still holding fundamental interests in the midstream and downstream sectors. We look forward to a rewarding year, where we solidify our aspirations and return to profitability,” Tinubu said.

    According to him, as oil prices gradually increased, Oando had commenced 2016 with a reinvigorated strategy hinged on key corporate initiatives to drive the company back to profitability and ensure fiscal efficacy, including optimisation of its balance sheet the company focused on aggressive debt reduction and recapitalisation.

    He noted that the group successfully restructured its existing debt through a N94.6 billion medium term note (MTN) with a local consortium with lower interest rates and a renewed five-year tenor while its upstream subsidiary, Oando Energy Resources (OER), completed its 2015 year-end summary of reserves recording a 6.0 per cent growth in 2P net reserves from 420.3 mmboe to 445.3 mmboe. The increase is attributed to the recognition of reserves related with producible oil and gas volumes 2C Resources also increased by 70 per cent from 122mmboe to 208mmboe.

    Official operational report showed that in the midstream, Oando Gas & Power (OGP) maintained its legacy of building successful pipeline businesses, generating returns and transferring on operatorship. The company successfully concluded the divestment of the Akute Independent Power Plant, a 12.15 megawatts power station servicing the Lagos State Water Corporation. OGP also signed a development agreement with TVER/ Micro LNG to develop a 20 mmscf/d Mini LNG plant in Ajaokuta, Kogi State, which will service a 1,000km radius in the Northern and Central regions of Nigeria. The facility is expected to commence operations in the second quarter of 2017.

    Also, Oando Downstream agreed on the terms for the sale of a N70.5 billion partial divestment to Vitol, the world’s largest commodities trader and Helios Investments Partners, a premier West African focused private equity firm. This alliance has been hailed as a testament of Oando’s legacy of building a successful downstream giant and a rejuvenation of Nigeria’s downstream sector through operational efficiencies and economies of scale.

    For the full year ended December 31, 2015, Oando recorded a net loss of N49.7 billion on a turnover of N381.7 billion as the global oil and gas industry struggled with historic slump. Oando’s 2015 losses were largely due to impairments and the acquisition cost and interest on debt facilities in Oando’s prolonged acquisition of ConocoPhillips Nigeria’s (COPN) onshore hydrocarbon assets.

    Tinubu recalled that 2015 was a turbulent year for the global oil and gas industry as traditional energy business operations had to be altered to enable industry players survive new reality, utilising cost optimisation systems, increased operational efficiency as well as lower capital expenditure budgets.

    “As the global economy returns to normalcy we remain committed in our drive to building platforms for long term sustained value creating businesses,” Tinubu assured.

    Official report meanwhile showed that in spite of the numerous challenges, Oando made significant achievements across the value chain in 2015. OER increased its total production to 20 million barrels of oil equivalent (mmboe) in the period compared with 9.1 mmboe in 2014. The increase between the annual periods was primarily from the acquisition of OMLs 60 – 63 in H2 2014, as well as the commencement of production from the Qua-Iboe field in Q1 2015.

    OER also successfully realised a cash inflow of $234 million by resetting its crude oil hedge from the previously hedged average of $95.35 per barrel to a new price of $65.00 per barrel on 10,615bbls/day till July 2017 and an additional 1,553 bbls/day until January 2019. The proceeds of the hedge reset along with cash in hand were used to pay down substantial portion of the company’s debt.

    By December 2015, OGP had completed 87 per cent of the Greater Lagos Phase 4 pipeline project which runs from Ijora to Bonny Camp in Lagos State. The Midstream subsidiary also commenced an 8.5km pipeline expansion project for the Central Horizon Gas Company, to increase CHGC’s capacity to 70mmscf/day.

     

    Oando Downstream successfully concluded tie-ins to third party terminals via a 2km Horizontal Directional Drilled pipeline. The jetty will alleviate delays associated with product delivery into the Apapa, reduce long term cost of operations, as well as provide possible revenue streams from excess capacity. In 2015, the marketing arm completed upgrading of its LPG plants, the Apapa LPG plantcapacity was upgraded from 15mt/day to 30mt/day, representing a 100 per cent increment, while the Benin plant was upgraded to include best in industry safety standards.

  • Oando chief, others discuss opportunities in energy sector

    Oando chief, others discuss opportunities in energy sector

    Africa’s power sector was one of the key issues discussed at last month’s World Economic Forum on Africa, held in Kigali, Rwanda.
    Speakers on different panels talked of how power shortages affect their businesses, while players in the energy industry deliberated the challenges, opportunities, and trends.
    According to Maritz Africa, the business leaders highlighted that poor electricity access is constraining the continent’s economic growth.
    The Group Chief Executive Officer of Nigerian energy company Oando, Adewale Tinubu, reckons Africa is “potentially the largest power market in the world,” based on available resources and demand for electricity.
    “We are losing a wonderful opportunity to leapfrog out of poverty by not having a more sustainable or robust energy policy,” said Tinubu. “I think… without a doubt, the biggest challenge we have to economic growth is really our poor consumption of energy, and invariably our very expensive consumption of energy. We are never going to become an exporting continent until we lower our cost of energy and we take advantage of these different [energy sources.”
    Although there has been some momentum in developing power projects in recent years, sub-Saharan Africa still has a long way to go with hundreds of millions of people not having access to grid-connected electricity.
    According to John Rice, vice chairman of General Electric, there are some well-intentioned initiatives geared towards meeting the energy gaps, but challenges related to financing, bureaucracy, traditional risk analysis, and decision-making based on election cycles have led to delays.
    He cited the case of the US-backed Power Africa initiative, which was launched in 2013 by President Barack Obama with a view to “double access to power in sub-Saharan Africa”. Power Africa, supported by a host of governments and private sector players, has an ambitious goal of adding 30,000MW of electricity.
    But, Rice noted, so far the number of megawatts added onto the grid directly related to the initiative “is very little”.
    Moving faster
    Jasandra Nyker, CEO of BioTherm Energy, a Southern Africa-focused investor in energy projects, called for a greater sense of urgency in developing projects.
    “When I talk sense of urgency I see [projects] needing to happen in the next two to three years,” said Nyker. “In my company, we [moved] from site identification to… providing power to the grid, it took us 36 months and we did that twice. So if a small company like mine can do that, I think more and more players out there can actually do it.”
    Nyker said her company was able to complete projects swiftly by working with surrounding communities to avoid conflicts over land. The community understood what was being done, how it would be done, and when benefits would accrue to them. BioTherm also managed expectations, and ensured the project was bankable from day one.
    Regional projects
    Oando boss Tinubu suggested the development of more regional mega-projects in the continent. But Nyker noted such projects are complex due to varying policies and structures in different countries. She cited the case of the Democratic Republic of Congo’s Grand Inga project, one of the world’s largest proposed hydropower schemes.
    “There is a lot of complexity when we look at regional integration, especially when it comes to a grid-connected project,” said Nyker. “If we really want to solve the energy crises in Africa we need to look into our countries first, before we think big. I think the Grand Inga project is very ambitious but I don’t think we should be setting our hearts and hopes in terms of that being a solution to our power needs because it is not going to happen in the next two or three years.”
    However, Erastus Mwencha, deputy chairperson of the African Union Commission, observed that some regional projects are taking shape. He gave the examples of Ethiopia supplying power to Kenya, and the West African Gas Pipeline – a high-pressure gas transmission system that exports gas from Nigeria to Ghana, via Benin and Togo.
    “There are regional initiatives, but of course we need to see more of these,” said Mwencha.
    Private sector involvement
    Tinubu noted the private sector can play a significant role in power generation, but only if there is a friendly business environment. He gave the example of Nigeria that has become reliant on private diesel generators, which are pricier to operate compared to industrial power.
    “What was missing was having an enabling environment, which the government has finally realised and has privatised the power system, liberalised tariffs and in the process we are now seeing the private sector getting involved in building new power plants, and we are now attracting global capital.
    “The difference is power is now seen as a business opportunity for investors to make a return,” said Tinubu. “People now have access to cheaper power than when the government was subsidising and [was] unable to meet that demand.”
    Signaling continued investor interest in power projects, Tony Elumelu, a Nigerian investor and chairman of Heirs Holdings, noted he would soon be making a US$2.1bn energy transaction.
    “That is an investment we are making, not… out of philanthropy, but because we see the returns on investments is quite high in Africa,” said Elumelu.

    President of the African Development Bank (AfDB), Akinwumi Adesina noted that over the next decade Africa must strive to attain “universal access to electricity.”
    “We have got to be so impatient with moving Africa forward relentlessly – we have no choice. In 2025, there is absolutely no reason why Africa should not be totally lit up with the power it needs to industrialise, because we must not forget no economy ever develops unless you have the base load power to drive industries and be competitive,” said Adesina.

  • Oando secures N94.6b loan from local banks

    Oando secures N94.6b loan from local banks

    Oando Plc yesterday secured a N94.6 billion facility from nine local banks to enable it restructure its debt positions and improve earnings.

    The financing, coordinated by the mandated Lead Arranger, Access Bank Plc, is a five-year Medium Term Note (MTN) given at the Nigeria Interbank Offered Rate (NIBOR) plus 200 basis points, to assist the company meet its financial obligations in the low crude oil price environment.

    In a statement, Oando Plc said it has substantially reduced its debt profile in the last 24 months, and the new loan facility would enable key restructuring of its remaining debt.

    Group Chief Executive of Oando Plc Wale Tinubu said: “In a bid to return to profitability in 2016, I am happy to announce the successful completion of the restructuring our overall debt profile into a N94.6 billion Medium Term, five-year consolidated facility, with a three-year moratorium on principal. This is the pivotal leg in our group restructuring plan of growth; via the upstream business, deleverage; via the disposal of $350 million in assets’ value in 2016, and our return to profitability in 2016, driven by our dollar earning oil export and trading activities”.

    Continuing, he said the company now stands diversified with higher weighted dollar denominated earnings, an optimised and restructured balance sheet with lower cost of capital and longer tenors. “With the upturn in global oil prices to levels above $50 per barrel, we now look forward to the successes of 2016, having ridden out the storm”.

    Other banks in the financing deal include Diamond Bank, Ecobank, First City Monument Bank, Fidelity Bank, Stanbic IBTC Bank, United Bank for Africa Plc, Union Bank and Zenith Bank.

    Speaking on behalf of the participating banks, the GMD/CEO of Access Bank Plc, Herbert Wigwe said Medium Term Loan (MTL) facility would allow Oando to optimize its balance sheet towards greater efficiency.

    “As we all know, Oando is the largest indigenous oil and gas player in the Sub Saharan Africa and this MTL facility would allow it to optimize its balance sheet towards greater efficiency and improve its working capital. This combined with the synergy of Investment by HVI into its downstream operations, will see Oando’s growth and development really take off,” Wigwe said.

    Oando has pledged to continue to exercise strong financial discipline, and the transaction further signifies the steadfast commitment from local banking institutions to support the sustained growth and development of the Nigerian oil and gas sector in spite of the rigid economic climate.

    Oando has navigated the ups and downs of the cyclical market by adapting quickly and being fiscally innovative to enable its business operations run as normal.

    In the Upstream, Oando posted a profitable first quarter 2015 in spite of the crude downturn, reinforcing investor confidence in its operations and asset portfolio. It also achieved significant operational milestones. The company’s Proven and Probable Reserves have increased from 420.3 Million Barrels of Oil Equivalent (mmboe) to 445.3 mmboe and maintained net output at 54,520 barrels of oil equivalent per day (boepd) and the commencement of production at Qua Iboe.

    Additionally, proactive fiscal measures resulted in a cash windfall of $283 million from the reset of oil hedges. The hedge adoption effectively ensures Oando Energy Resources (OER) receives income approximately pegged to a pre-agreed price until 2019, and enables it to conveniently service its debt obligations, which are denominated in both naira and Us dollar, regardless of oil prices and without foreign exchange exposure.

    In the Midstream, Oando Gas & Power (OGP) posted a N5.1 billion Profit After Tax last year and recently announced the development of a multi-billion Naira mini-LNG facility in Ajaokuta, Kogi to serve industrial clusters in the North.

    The company which provides gas and power solutions to over 170 industrial and commercial customers is also concluding the 10km Ijora to Marina expansion of its Greater Lagos pipeline network to increase supply capacity, while providing a cheaper power solution for industries and commercial enterprises along the axis.

    OGP inaugurated its expanding Compressed Natural Gas (CNG) programme in 2013, and is also spearheading several long term projects including a 400km South-West to North-West gas pipeline and a Central Processing Facility (CPF) which will serve as the primary gas gathering and processing hub in the Niger Delta.

    In cooperation with the Rivers State Government, OGP is constructing a 8km build out of the Central Horizon Gas Company pipeline franchise within the Trans-Amadi area in Port Harcourt ensuring cost-savings across board, economic development, and environmental awareness.

    Together with Helios and Vitol (HV Investments), Oando will soon conclude a strategic partnership to potentially create Africa’s largest Downstream company. HV Investments’ equity buy-in into Oando’s Downstream business will be for a consideration of $276 million, and will vastly increase Oando’s Downstream operations and retail footprint.

    Already the largest indigenous supply and trading player in the sub-Saharan region, Oando has increasingly focused on efficacy in the reception of products at its newly completed jetty in Apapa, Lagos.

    The jetty will allow 45,000 DWT vessels to berth and discharge their products without lightering and demurrage, and will enable cost-savings across the industry in excess of $120 million per annum and lead to higher margin volumes with an estimated $36 million expected annually in revenue.

    The novel infrastructure, the sector’s first in decades, will provide a more efficient and timely platform for product receipt to all marketers via its half-kilometer subsea pipeline, and a 16″ 3km onshore line capable of delivering over three million tonnes a year.

     

  • Winner emerges in Oando Marketing contest

    Oando Marketing PLc has announced Dr Rachel Adeyeye as the winner of its maiden edition of feature article writing competition with the theme: ‘’Sustainable solutions to tackling climate change in developing countries.”

    The competition is one of the initiatives adopted by Oando Marketing to support the Africa skills initiative development being promoted by the World Economic Forum and designed to encourage literary skills development and eco-friendly attitude among Nigerians.

    Adeyeye’s essay was selected from 150 entries, passed through six rigorous stages and judged on benchmarks, such as quality of writing, strength of analysis, grammar, punctuation, layout and audience appeal.
    At the presentation, OANDO’s Head of Marketing Communications Mr. Seun Adeosun, said the contest was aimed at affecting lives and educating people, adding that the initiative was to reverse the low standard of literary skills in the country.

    He said: “We found that the level of communication is gradually degrading. We organised the competition to give our consumers an opportunity to express themselves by writing on a topic that has a global appeal and impact on the world.”
    Adeosun explained that the initiative falls under the organisation’s Corporate Social Responsibility (CSR), adding that the theme revolved around climate change and the solutions available for developing countries to adopt earth-friendly actions.

    Adeyeye, who received a N400, 000 cheque, recalled how she applied for the contest through her Facebook page.
    “But for me, it was beyond winning the prize. I participated in this because I discovered that even though I have been hearing about climate change; my knowledge about it was shallow. I wanted to use the competition to boost that knowledge. I saw the advert on Facebook. I started researching almost immediately” Adeyeye said.
    She dedicated her success to God, adding that her family members were supportive when she was undertaking it.

  • Afrinvest picks Conoil, Oando, UBA, GTB, 10 others as top stocks for 2016

    Investors looking for above average gains and a reflective stock portfolio to beat the downtrend in 2016 should concentrate on 14 stocks across five key sectors of the economy, according to the 2016 stock recommendation by Afrinvest Securities.

    The 2016 stock recommendation was based on the research and market intelligence prepared by analysts at Afrinvest Securities, a Lagos-based dealer on the Nigerian Stock Exchange (NSE) and member of Afrinvest (West Africa).

    The report portfolio was built around the key sectors such as banking, consumer and industrial goods, insurance, and oil and gas sectors.

    Afrinvest Securities picked 14 stocks across the five sectors with different rating of buy and accumulate, citing potential earnings and resilience to weather the tough operating environment.

    The stocks included Guaranty Trust Bank (GTB); United Bank for Africa (UBA); Zenith Bank International; Nestle Nigeria; Nigerian Breweries; Flour Mills of Nigeria; Dangote Sugar Refinery; Dangote Cement; AIICO Insurance; Continental Reinsurance; AXA Mansard Insurance; Oando, Conoil and Total Nigeria Plc.

    “One key theme that has come up in our analysis and valuation of companies is the tougher operating environment which is consequent on the weak macroeconomic backdrop. Slowing Gross Domestic Products (GDP) growth has been a major headwind on sales of manufacturing companies and risk assets creation by banks. Elevated inflationary pressures and foreign exchange shortages have driven-up costs whilst uncertain direction of fiscal and monetary policy have together worsened the risk landscape and impaired market valuation of assets,” Afrinvest Securities stated.

    According to the report, GDP growth may rebound to 3.5 per cent in 2016 from estimated 3.0 per cent in 2015, largely due to expectation on fiscal stimulus. Inflationary pressure is however predicted to hit double digit while foreign exchange supply constraint would also remain a challenge in 2016 given the negative sentiments deterring autonomous foreign exchange inflow and bearish outlook for oil prices.

    The report noted that these mutually reinforcing factors would combine to pressure revenue, earnings and margins across sectors and remain a drag on market sentiments. The report assumed equity risk premium and inflation assumptions to be 11.4 per cent and 10.1 per cent respectively.

    Afrinvest Securities said while it rated most of the banking stocks, its top picks in the sector were GTB, UBA and Zenith Bank, due to their “rich return on equity, lower cost profile and relatively healthier balance sheet, are positive driver of earnings and sentiment”.

    “We believe Tier-1 banks will continue to deliver superior earnings performance relative to Tier-2 and are better equipped to weather the storm in light of the current challenges, we maintain that investors underweight on Tier-2 banks in favour of Tier-1 banks.

    “We believe most of the banking tickers have already been heavily discounted for projected weaker forward earnings to a point that positive earnings surprises in 2016 will have massive positive knock-on impacts on pricing. Our Tier-2 coverage has higher upsides but we advocate selective and cautious positioning with a keen eye on sentiment drivers,” Afrinvest stated.

    The report noted that while the overall outlook for the consumer goods sector appears negative, there are still opportunities in specific stocks in the sector, adding that sector pricing over a long term horizon presents a fantastic opportunity for discerning investors.

    The report added that the top picks in the consumer goods sector-Nestle Nigeria, Nigerian Breweries, Flour Mills of Nigeria and Dangote Sugar Refinery were selected based on their continuous investment in capacity and expansion, leadership of their respective segments and investor sentiments towards these stocks.

    “In addition, the stocks are so selected given their relative defensiveness as blue chip stocks relative to other stocks within the sector,” Afrinvest said in relation to its top picks in the consumer goods sector.

    The report said Dangote Cement stands out in the industrial goods sector because of its continental operations and dominance of the domestic market.

    According to analysts, as the struggle for market share continues in the cement industry and margins contract, companies with strong volumes growth potential and cost leaders with capacity to grow earnings per share are in better position to deliver better returns.

    “Industry price and cost leader, Dangote Cement is best positioned for this with over 60 per cent of Nigeria’s market share and increased exposure to other regions in Africa with strong earnings potential,” Afrinvest stated.

    Analysts said Dangote Cement’s share price could rise to N183.92 per share over the next 12 months.

    The report expected gross premium growth in the insurance sector to remain positive in 2016, noting that while macroeconomic challenges remain a critical concern, demographic attractiveness and low insurance penetration rate in Nigeria accentuates the compelling growth potential of the sector.

    The report added that tighter regulatory activities which has brought about the implementation of “No Premium No Cover” rule, the launching of the micro insurance scheme and the Takaful insurance as well as the recent claims payment guidelines are expected to strengthen recent gains observed in the sector.

     

    Against the negative sentiments that had trailed Oando since the release of its 2014 results, analysts said the stock appeared to have bottomed out and now presents attractive buy opportunity for investors.

    It noted that “against the colossal sell-off in Oando following the release of its 2014 results, the stock has bottomed out and fundamental analysis gives a ‘buy’ rating”.

    Afrinvest Securities also placed buy on Conoil while urging investors to accumulate shares of Total Nigeria.

    “Since the fall in global oil prices, investor sentiments towards oil and gas stocks have been largely dampened due to the blue outlook. Following this, downstream Nigerian oil companies suffered immediate massive sell-offs. However, our analysis of the companies within our coverage in the downstream sector indicates that bottom line declines have been against foreign exchange illiquidity and subsidy delays. Going forward, with technical removal of subsidy through the price modulation template and diversification strategies of some, we expect an improvement in company returns,” Afrinvest stated.

  • Shareholders approve Oando, OER buy-out offer

    Shareholders of Oando Energy Resources (OER) Inc- the Toronto Stock Exchange (TSX)-listed exploration and production subsidiary of Oando Plc, have approved the proposal by Oando Plc to buy out the outstanding minority shareholdings in the exploration and production subsidiary.

    OER announced at the weekend that at a special meeting on February 25, 2016 in Vancouver, British Columbia, a total of 550.46 million votes were cast by shareholders, representing 69.15 per cent of the total issued and outstanding common shares. A 100 per cent of the votes cast were voted in favour of the resolution.

    However, the plan of arrangement remains subject to the final approval of the Supreme Court of British Columbia and subject to satisfaction or waiver of various other conditions specified in OER’s management information circular dated January 19, 2016. The parties have agreed to extend the outside date to March 25, 2016.

    As part of the transaction, OER has notified the TSX and applied for the delisting of the common shares upon completion of the arrangement. In addition, in accordance with Section 720 of the TSX Company Manual, the company has applied to voluntarily delist the common share purchase warrants it issued from the facilities of the TSX upon completion of the arrangement. An exemption from the requirement for security holder approval of such delisting is available pursuant Section 604(f) of the TSX Company Manual because Oando Plc holds more than 90 per cent of the common shares.

    However, the completion of the transaction, including the delisting of the common shares and warrants from the facilities of the TSX, will be subject to, among other things, approval by the syndicate of lenders in OER’s $450 million senior secured facility.

    Oando had entered into a definitive agreement with OER to sell the outstanding minority shareholdings in the OER to another wholly-owned foreign-based subsidiary, Oando E&P Holdings Limited.

    Oando E&P Holdings Limited will also subsequently take over shares held by Oando Plc and other institutional shareholders in OER, making OER a wholly-owned subsidiary of the Oando E&P Holdings Limited, a private company incorporated under the laws of the Province of British Columbia as a wholly-owned subsidiary of Oando Plc.

    Earlier regulatory filing at the Nigerian Stock Exchange (NSE) indicated that Oando E & P Holdings Limited would acquire all the outstanding minority shares under a plan of arrangement for a cash consideration of $1.20 per share.

    Oando holds, either directly or indirectly, 746,107,838 of the common shares of OER, representing approximately 93.7 per cent of the issued and outstanding common shares. Pursuant to the plan of arrangement, Oando E & P Holdings Limited will acquire all of the common shares that are held either directly or indirectly by the institutional shareholders and Oando.

    In consideration for such transfer, Oando and the institutional shareholders shall receive such number of shares of Oando E & P Holdings Limited as reflects the number of their contributed common shares for the purposes of completing the transactions contemplated by the plan of arrangement. The referenced institutional shareholders are M1 Petroleum Ltd, West African Investment Ltd and Southern Star Shipping Company Inc.

    The consideration represents a 177.2 per cent premium to the 20-day volume weighted average price of OER’s common shares on the Toronto Stock Exchange for the period ending December 21, 2015, using the Bank of Canada US$ to CDN$ closing exchange rate of 1.3965 on December 21, 2015. The transaction provides total consideration to holders of minority shares of approximately US$13.7 million and implies an equity value for the company of approximately US$955.3 million.

  • Shareholders meet on Oando, OER buy-out offer

    Oando Energy Resources (OER)- the Toronto Stock Exchange (TSX)-listed exploration and production subsidiary of Oando Plc, has scheduled a shareholders’ meeting to vote on a proposal by Oando Plc to buy out the outstanding minority shareholdings in the exploration and production subsidiary.

    The meeting, according to a regulatory filing yesterday, is scheduled for February 25, 2016 in Vancouver, British Columbia. The board of OER has already recommended to shareholders to vote in favour of the special resolution authorizing the purchase of the minority shares.

    As part of the transaction, OER has notified the TSX and applied for the delisting of the common shares upon completion of the arrangement. In addition, in accordance with Section 720 of the TSX Company Manual, the company has applied to voluntarily delist the common share purchase warrants it issued from the facilities of the TSX upon completion of the arrangement. An exemption from the requirement for security holder approval of such delisting is available pursuant Section 604(f) of the TSX Company Manual because Oando Plc holds more than 90 per cent of the common shares.

    However, the completion of the transaction, including the delisting of the common shares and warrants from the facilities of the TSX, will be subject to, among other things, approval by the syndicate of lenders in OER’s $450 million senior secured facility.

    Oando had entered into a definitive agreement with OER to sell the outstanding minority shareholdings in the OER to another wholly-owned foreign-based subsidiary, Oando E&P Holdings Limited.

    Oando E&P Holdings Limited will also subsequently take over shares held by Oando Plc and other institutional shareholders in OER, making OER a wholly-owned subsidiary of the Oando E&P Holdings Limited, a private company incorporated under the laws of the Province of British Columbia as a wholly-owned subsidiary of Oando Plc.

    Earlier regulatory filing at the Nigerian Stock Exchange (NSE) indicated that Oando E & P Holdings Limited would acquire all the outstanding minority shares under a plan of arrangement for a cash consideration of $1.20 per share.

    Oando holds, either directly or indirectly, 746,107,838 of the common shares of OER, representing approximately 93.7 per cent of the issued and outstanding common shares. Pursuant to the plan of arrangement, Oando E & P Holdings Limited will acquire all of the common shares that are held either directly or indirectly by the institutional shareholders and Oando.

    In consideration for such transfer, Oando and the institutional shareholders shall receive such number of shares of Oando E & P Holdings Limited as reflects the number of their contributed common shares for the purposes of completing the transactions contemplated by the plan of arrangement. The referenced institutional shareholders are M1 Petroleum Ltd, West African Investment Ltd and Southern Star Shipping Company Inc.

    The consideration represents a 177.2 per cent premium to the 20-day volume weighted average price of OER’s common shares on the Toronto Stock Exchange for the period ending December 21, 2015, using the Bank of Canada US$ to CDN$ closing exchange rate of 1.3965 on December 21, 2015. The transaction provides total consideration to holders of minority shares of approximately US$13.7 million and implies an equity value for the company of approximately US$955.3 million.

  • Oando delights clients with free car services

    Oando delights clients with free car services

    Oando Marketing has held a free car diagnostic event for automobile owners at  the National Stadium. The event tagged: Oleum SYN Car Diagnostics, had over 1000 vehicles pre-registered for free car checks and oil change services.

    This initiative was powered by Oleum, the premium auto-motive lubricant from the stables of Oando Marketing.

    The free car diagnostic day was to promote car-care consciousness, ensuring fewer road accidents and mishaps due to mechanical and technical faults.

    The Oil change session was carried out by Oando auto-care centres, well-known for their professional auto-services, while the car diagnosis was performed by Oando Marketing’s technical partners, Automedics, a renowned automotive mechatronics outfit who specialise in vehicle diagnosis, repairs, maintenance and sales of spare parts in Lagos.

    Oando Marketing Chief Executive Officer Abayomi Awobokun said the initiative was primarily focused on informing the public that Oleum cares about their cars. “Today, it’s more than generating awareness about our lubricants, it’s also about easing holiday travel for auto-mobile users. So, this free car check was for people to detect exactly what is wrong with their car, get expert advice on the right auto-services and products best for their cars, as well as interact on a personal basis with our team of experts.”

    Oando Marketing’s Head of Lubes, Mrs Lilian Ikokwu, said the event was aimed at creating awareness for Lagosians on the need to be more proactive about car care. “We are giving free diagnostics today to as many as we can, as well as offering free oil change services, over 1000 people demonstrated interest. It’s just another way to further show our commitment to quality products and excellent customer service,” she said.

    One of the beneficiaries, Mr Henry Anabike, who had his car diagnosed, said his greatest joy was that the cause of his car consuming too much fuel has been identified and fixed.

    Anabike hailed Oando Marketing for saving him from paying huge sums of money to mechanics, saying: “Diagnosing a vehicle is very expensive; Oando Marketing has saved me that cost  and I have really learnt a lot about my vehicle. Since, I have knowledge of what has been causing the hiccups in my car; I can now better the problem better. I can’t thank Oando Marketing enough. I am travelling for the holidays and I can assure you that the benefit is well-appreciated.”

  • Oando buys out minority shareholders in E & P subsidiary

    Oando buys out minority shareholders in E & P subsidiary

    Oando Plc has entered into a definitive agreement with its Toronto Stock Exchange-listed oil and gas exploration and production subsidiary, Oando Energy Resources (OER) to sell the outstanding minority shareholdings in the OER to another wholly-owned foreign-based subsidiary, Oando E&P Holdings Limited.

    Oando E&P Holdings Limited will also subsequently take over shares held by Oando Plc and other institutional shareholders in OER, making OER a wholly-owned subsidiary of the Oando E&P Holdings Limited, a private company incorporated under the laws of the Province of British Columbia as a wholly-owned subsidiary of Oando Plc.

    A regulatory filing made yesterday at the Nigerian Stock Exchange (NSE) indicated that Oando E & P Holdings Limited would acquire all the outstanding minority shares under a plan of arrangement for a cash consideration of $1.20 per share.

    Oando holds, either directly or indirectly, 746,107,838 of the common shares of OER, representing approximately 93.7 per cent of the issued and outstanding common shares. Pursuant to the plan of arrangement, Oando E & P Holdings Limited will acquire all of the common shares that are held either directly or indirectly by the institutional shareholders and Oando.

    In consideration for such transfer, Oando and the institutional shareholders shall receive such number of shares of Oando E & P Holdings Limited as reflects the number of their contributed common shares for the purposes of completing the transactions contemplated by the plan of arrangement. The referenced institutional shareholders are M1 Petroleum Ltd, West African Investment Ltd and Southern Star Shipping Company Inc.

    The consideration represents a 177.2 per cent premium to the 20-day volume weighted average price of OER’s common shares on the Toronto Stock Exchange for the period ending December 21, 2015, using the Bank of Canada US$ to CDN$ closing exchange rate of 1.3965 on December 21, 2015. The transaction provides total consideration to holders of minority shares of approximately US$13.7 million and implies an equity value for the company of approximately US$955.3 million.

    The board of directors of OER has unanimously, with Messrs. Wale Tinubu and Boyo abstaining, determined that the plan of arrangement is fair to shareholders and it would be in the best interests of the company to enter into the arrangement agreement.

    However, the implementation of the plan of arrangement will be subject to approval by the holders of the affected securities at a special meeting expected to be held on February 25, 2016. The implementation of the plan of arrangement will be subject to approval by 662/3 per cent of the votes cast by holders of common shares.

    Although the transaction will constitute a “business combination” for the purposes of MI 61-101, an exemption from the “majority of the minority” approval is available because Oando holds either directly or indirectly more than 90 per cent of the common shares.

    Oando is entitled to, and pursuant to the arrangement agreement, covenanted to vote or cause to be voted all common shares that it controls in favour of the special resolution approving the plan of arrangement to be considered at the special meeting. Accordingly, approval of the arrangement resolution is expected. The transaction also will be subject to applicable regulatory approvals and certain closing conditions customary in transactions of this nature.

  • Oando invests $400m in lubricants production

    Oando invests $400m in lubricants production

    Oando Marketing Plc has  invested  $400million to produce a wide range of lubricants. It has also introduced a new lubricant, called Oleum SYN into the automobile market.

    Speaking at the unveiling of the synthetic lubricant, Oleum SYN, in Lagos, its Chief Operating Officer, Mrs. Williams Olaposi, said the product was introduced to meet the needs of users of top-of-the-range cars.

    Oando’s decision to produce synthetic lubricant, she said, was informed by the need to satisfy various layers or users of automobiles.

    She said: “The firm believes in meeting the yearnings of various users of automobiles in Nigeria. For years, the country has been using fairly used cars otherwise known as Tokunbo, and Oando has lubricants for people driving such cars.

    “In recent times, there has been a paradigm shift from the use of Tokunbo to new cars. Nigerians are now driving new and highly sophisticated vehicles, and the only way to satisfy people in that segment was to produce synthetic lubricant.”

    She said every litre of Oleum SYN comprises top quality base oil and additives, noting that the product has been certified internationally.

    Olaposi said Oando conducted several years of research before coming out with the product, stressing that a lot of money was invested in the production of lubricants by the company.