The Nation Newspaper

Tag: Oando

  • Oando, JV Partner promote health initiative

    Oando and its JV partner, Energia have established social impact initiatives in its host community of Kwale, Delta State, through which three per cent of its gross revenue is set aside for the development of host communities and managed by two trust boards comprising experienced professionals from the community, the government and the JV.

    One of such initiatives is the recently concluded three-day community medical outreach in Kwale, themed ‘Health is Wealth’. The initiative is the JV partners’ first ever medical outreach in Kwale, Ndokwa West Council Area of Delta State where it operates the Ebendo/Obodeti marginal field, OML 56. The event commenced at the Ebendo Health Centre and proceeded to Obodougwa, Isumpe, Umusadege, Umusam and Ugbani communities in Kwale.

    To reiterate the importance of Corporate Social Responsibilities (CSR) to its company,  Babafemi Onasanya, General Manager, Sub Surface, representing the Chief Operating Officer, Ainojie Irune, of Oando Petroleum Development Company said; “As a JV we believe that it is important to impact these communities positively. We want to show, through leading by example that you can be proudly indigenous, profitable and at the same time make the world a better place. We must deliberately always give back to our own.”

    The Chief Medical Director (CMD), Central Hospital, Kwale, Dr. Gabriel Abanum, representing the Delta State Commissioner for Health, Dr. Emordi Ononye in his remarks, praised the Energia/Oando JV  partnership with its host communities in pursuit of the WHOSDG3, which includes grassroots healthcare provision for all.

    He said the development tallies with the state government’s investment in the health sector like free maternal care, free care for all under-five year olds. The initiative is also in tandem with government’s free HIV screening and treatment and the health contributory commission, where all civil servants registered to assess care free of charge.

    He said the state has even gone further to accommodate those from the informal sector to give residents a full complement of health all year round.” He further described the relationship between the company and Emu-Ebendo as a model to be emulated.

    The medical outreach is aimed at achieving the World Health Organization Sustainable Development Goals 3 (WHOSDG3), in providing access to basic healthcare to its communities. Initiatives based in communities can have widespread effects. Not only can they transform the communities in which they are located, but they can act as seedbeds for similar programs elsewhere.

  • Oando: US-Nigeria Council for Food Security asks SEC to follow due process

    Nigeria Council for Food Security, Trade & Investment wants the Securities & Exchange Commission (SEC) to exercise restraint in its handling of the Oando matter and follow due process.

    The council which  promotes opportunities in Nigeria to US investors and advances commercial partnerships which contributes to economic growth of Nigeria said in a statement that SEC should  sheath its sword in its current feud with Oando.

    “Oando PLC, as a founding member of the Council and as an active and valued participant in the Council’s activities, plays an important role in promoting business and direct investment in Nigeria,” the council said.

    Read Also: Oando: Pressure mounts on SEC over due process

    Reiterating its commitment to strengthening the commercial relations between the United States and Nigeria,the council said it “recognizes the importance that strong capital markets play in attracting foreign investment, creating new jobs and stimulating economic growth.”

    This, according to it, underlines the fact that if a regulatory body for the capital market is perceived to be stifling the market it will have a detrimental effect on the ease of doing business, business growth and sustenance, deter new business and international investment, all of which will eventually translate to economic decline.

    The USNC further challenged the regulatory body to discharge its duties with due process and fair equitable treatment for all parties.

  • Stakeholders slam SEC over Oando

    Shareholders yesterday knocked the Securities and Exchange Commission (SEC) for punishing Oando Plc.

    They queried the regulator’s powers to impose such sanctions, claiming that its actions would harm the firm, damage shareholders’ investment and weaken market confidence.

    On Friday, SEC announced the conclusion of the investigation of Oando and barred its Group Chief Executive Officer (GCEO), Mr Wale Tinubu and the Deputy GCEO, Mr. Omamofe Boyo, from being directors of public companies for five years.

    It also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected board members to the company, among other actions.

    But Oando said that the “alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.”

    It obtained a Federal High Court injunction on Monady to restrain SEC from taking any step concerning its imposition of N91,125, 000.00 fine on Tinubu, and barring him and Boyo from being directors of public companies for a period of five years.

    One of the company’s shareholders, Kabiru Tambari, said yesterday that SEC’s actions “defied logic” and could kill the company.

    Speaking on behalf of the Sokoto shareholders of the firm, Tambari said: “We are not happy at all with has happened. Wale Tinubu and his management team have suffered, they have put their resources; energy, time; to keep this company moving forward and now the SEC wants to take it away from not just them but us the shareholders as well.

    “When the company was making losses the SEC didn’t bring up all these infractions and sanctions, but now the company is doing well, and has returned to profit and they’ve come with such drastic actions. This will foil the company’s attempt to pay us dividend at the end of the year. It is clear that the SEC wants to kill the company.

    “How else do you explain an action such as this that defies logic? We, the shareholders, who the SEC are meant to be protecting are not satisfied with the way this has been handled.

    “They should think of the effect their actions will have on the market, if this continues, the company will not be able to pay salaries, the shares will be devalued badly leaving us in a precarious position. We implore the Court to look into the matter carefully and adjudicate accordingly.”

    Read also: Oando: Regulator barred from removing directors

    Another shareholder, Mr. Patrick Ajudua, alleged that  SEC may have overreached itself.

    Ajudua, who is the National Chairman, New Dimension Shareholder Association, said: “The SEC’s findings on Oando speak volumes. As shareholders of the company, we are more interested in the protection of minority shareholders, the development and protection of the capital market.

    “The consequences of these far reaching directives from the regulator will have an adverse effect on the share price of the company both locally and internationally, market integrity, rule of law and expected returns on investment.”

    Ajudua claimed that the SEC, as presently constituted, has no power to issue such far reaching directives without the consent of a Board.

    He added: “Disappointedly, the regulator has been operating without a board for more than four years and as such is like a car without a pilot, a human being with a body but no head. Even the USA SEC has not operated without a board since 1939.

    “The law setting up SEC is very clear on power, authority and function of an acting DG. Therefore it is my submission without prejudice to the rights of Directors of Oando to seek judicial intervention that the SEC as a body had gone beyond the remit of their powers.

    “I strongly support the steps taken by Oando in seeking legal redress and justice. SEC as the apex regulator of capital market must be seen to operate within the rule of law, you can’t beat a child and ask him not to cry.”

    Founder of Stanbic IBTC Bank Plc, Atedo Peterside, also weighed in on the issue.

    Peterside, a renowned financial expert shared his concerns on his Twitter handle last Saturday.

    He tweeted: “On Oando, what I don’t understand is why the SEC would not give the findings of the Forensic Audit to Oando and give them an opportunity to defend themselves? The findings of the Forensic Audit should be made public alongside Oando’s responses so we can all judge for ourselves.”

    Another analyst, Johnson Chukwu, who spoke on Channels Television, also faulted the SEC’s sanctions.

    Chukwu, Chief Executive Officer (CEO) of Cowrie Asset Management said: “For the past four years the SEC has not had a Board and the absence of an oversight body is a major constraint to a regulator like SEC.

    “What they have done is tie their hands to the back; they are trying to correct and implement corporate governance in a company when they themselves do not have a corporate governance position or structure of their own, coupled with other internal issues that they have.”

    Another Twitter user, Yinka Ogunnubi, questioned the regulator’s powers to impose the sort of sanctions it did, saying: “I think it’s time we started asking ourselves some very important questions; does the SEC have the powers to remove Directors of a listed Company? Does the SEC which doesn’t have a Board have the locus standi to take actions against a listed company based on corporate governance issues?”

  • Stakeholders fault SEC actions against Oando

    Stakeholders, including shareholders, have faulted the Securities and Exchange Commission (SEC)’s sanction of oil firm Oando Plc.

    They questioned the regulator’s powers to impose such sanctions, claiming that its actions would harm the firm, damage shareholders’ investment and weaken market confidence.

    The SEC had on Friday announced the conclusion of the investigation of Oando and barred its Group Chief Executive Officer (GCEO), Mr Wale Tinubu and the Deputy GCEO, Mr Omamofe Boyo, from being directors of public companies for a period of five years.

    It also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected board members to the company, among other actions.

    But Oando said the “alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.”

    It obtained a Federal High Court injunction restraining SEC from taking any step concerning its imposition of a fine of N91, 125,000.00 on Tinubu, and barring him and Boyo from being directors of public companies for a period of five years.

    One of the company’s shareholders, Alhaji Kabiru Tambari, said on Tuesday that the SEC’s actions “defied logic” and could kill the company.

    Speaking on behalf of the Sokoto Shareholders of the firm, Tambari said: “We are not happy at all with has happened. Wale Tinubu and his management team have suffered, they have put their resources; energy, time; to keep this company moving forward and now the SEC wants to take it away from not just them but us the shareholders as well.

    “When the company was making losses the SEC didn’t bring up all these infractions and sanctions, but now the company is doing well, and has returned to profit and they’ve come with such drastic actions. This will foil the company’s attempt to pay us dividend at the end of the year. It is clear that the SEC wants to kill the company.

    “How else do you explain an action such as this that defies logic? We, the shareholders, who the SEC are meant to be protecting are not satisfied with the way this has been handled They should think of the effect their actions will have on the market, if this continues, the company will not be able to pay salaries, the shares will be devalued badly leaving us in a precarious position. We implore the Court to look into the matter carefully and adjudicate accordingly.”

    Read also: Oando: Regulator barred from removing directors

    Another shareholder, Mr. Patrick Ajudua, alleged that the SEC may have overreached itself.

    Ajudua, who is the National Chairman, New Dimension Shareholder Association, said: “The SEC’s findings on Oando speak volumes. As shareholders of the company, we are more interested in the protection of minority shareholders, the development and protection of the capital market.

    “The consequences of these far-reaching directives from the regulator will have an adverse effect on the share price of the company both locally and internationally, market integrity, rule of law and expected returns on investment.”

    Ajudua claimed that the SEC, as presently constituted, has no power to issue such far-reaching directives without the consent of a Board.

    He added: “Disappointingly, the regulator has been operating without a Board for more than four years and as such is like a car without a pilot, a human being with a body but no head. Even the USA SEC has not operated without a Board since 1939.

    “The law setting up SEC is very clear on power, authority and function of an acting DG. Therefore it is my submission without prejudice to the rights of Directors of Oando to seek judicial intervention that the SEC as a body have gone beyond the remit of their powers.

    “I strongly support the steps taken by Oando in seeking legal redress and justice. SEC as the apex regulator of capital market must be seen to operate within the rule of law, you can’t beat a child and ask him not to cry.

    “Efforts must be made to give the company the opportunity to defend the allegations and where they are found wanting necessary sanction can be made with human face as to err is human and to forgive is divine. Minority shareholders must not be made to suffer as a result of this unhealthy fight.”

    Founder of Stanbic IBTC Bank Plc, Atedo Peterside, also weighed in on the issue.

    Peterside, a renowned financial expert shared his concerns on his Twitter handle last Saturday.

    He tweeted: “On Oando, what I don’t understand is why the SEC would not give the findings of the Forensic Audit to Oando and give them an opportunity to defend themselves? The findings of the Forensic Audit should be made public alongside Oando’s responses so we can all judge for ourselves.”

    Another analyst, Johnson Chukwu, who spoke on Channels Television, also faulted the SEC’s sanctions.

    Chukwu, Chief Executive Officer (CEO) of Cowrie Asset Management said: “For the past four years the SEC has not had a Board and the absence of an oversight body is a major constraint to a regulator like SEC. What they have done is tie their hands to the back; they are trying to correct and implement corporate governance in a company when they themselves do not have a corporate governance position or structure of their own, coupled with other internal issues that they have.”

    Another Twitter user, Yinka Ogunnubi, questioned the regulator’s powers to impose the sort of sanctions it did.

    He tweeted: “I think it’s time we started asking ourselves some very important questions; does the SEC have the powers to remove Directors of a listed Company?

    Does the SEC which doesn’t have a Board have the locus standi to take actions against a listed company based on corporate governance issues?”

  • Why wasn’t Oando given a fair hearing?

    The long awaited results from the forensic audit into Oando PLC, was finally released on Friday, May 31, 2019 on the website of the Securities and Exchange Commission (SEC) indicating weighty infractions with attendant sanctions leveled against the Company.

    In a press statement issued on its website, Oando PLC responded to the SEC’s report saying: “Oando is of the view that these alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the Company. The Company has not been given the opportunity to see, review and respond to the forensic audit report and so is unable to ascertain what findings (if any) were made in relation to the alleged infractions and defend itself accordingly before the SEC. The Company reserves its rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interests of all its shareholders.”

    The severity of the penalties and the timing of the release has roused public curiosity as to the motive and the basis for the penalties. According to the Chief Operating Officer, Oando Energy Resource, Dr. Ainojie ‘Alex’ Irune, at a press conference in the Company’s head office, “We were not given a chance to review and respond to the outcome of the report. You do not sentence a person to death without giving him or her a chance to defend him or herself. In this instance we have been sentenced to death without knowing what our crime is or being given a chance to defend ourselves. At the barest minimum, best practice requires that you give the person a chance of a fair hearing. We have not been accorded this opportunity.” Dr. Irune explained that when the company made the decision to drop its court case challenging the SECs decision to carry out a forensic audit it was assured that they could trust the system for an independent investigation that would be fair and follow due process. He reiterated that it was in the spirit of transparency, cooperation and full disclosure, they agreed to the forensic audit.

    Echoes of Oando’s sentiments are resounding across the country with everyone wanting to know what exactly have the Oando management team done to warrant such steep penalties’. Business personalities such as Atedo Peterside, founder of Stanbic IBTC bank went so far as to go on social media to publicly ask the SEC why it would not share the findings of the forensic audit with Oando thus giving them an opportunity to defend themselves. He went on further to challenge the SEC to share the forensic audit findings and Oando’s response with the general public so we can all judge for ourselves.

    According to a media source at the Oando press briefing, the forensic audit report was ready and submitted by Deloitte and Touche as far back as December 2018. Why the SEC then decided to sit on the report for six whole months without engaging Oando where necessary, remains a mystery. It also brings to mind the famous quote, power corrupts, but absolute power corrupts absolutely. Is this a case of abuse of power, or has someone been put under duress to release the report without any regard for due process? What are the details of the infractions as opposed to a summary and what are the associated penalties for each infraction according to the SEC rule book?

    Drawing from a story by Proshare “Memo to the Market: The Oando Corporate Journey – At the Regulators Gate”, the publication said: “Regulatory authorities in this age, as we have seen with the Debt Management Office (DMO) under Dr. Abraham Nwankwo and sustained under a new leadership understand that their ultimate responsibility is to build businesses to be viable entities, stronger and not destroy value. Sanctions arising from regulatory action therefore must be in accordance with extant rules and regulations, severe relative to infractions, precise and satisfy the deterrence principle.”

    Does the SEC have the right to institute these penalties? According to the guidelines of the SEC, Mary Uduk, as acting DG of the SEC was meant to submit her findings to the Board of the SEC which has been non-existent since Mounir Gwarzo was appointed DG of the SEC. This is not the norm and does not reflect corporate governance best practice. In the absence of a Board, a sign off from the Minister of Finance is required. Was this the case with the Oando Forensic Audit Report? The consensus following the press conference was that the publishing of the report whose cost would be borne by Oando without informing the principal, Oando, was contrary to best practice. It further shows that these are not the actions of a regulator working in the best interests of the market specifically minority shareholders. These actions are damaging to the Nigerian capital market and will further discourage foreign direct investment (FDI) into the country.

    In terms of foreign direct investment, back in 2013 inflows totaled $5.6 billion, most of it in the telecom and energy sectors. In 2018, Nigeria’s FDI flattened to $2 billion. In the last quarter of 2018. According to a recent article by Forbes contributor, Kenneth Rapoza titled ‘Nigeria has Become Africa’s Money-losing Machine’, if you want to lose money in one of Africa’s biggest markets, put it in Nigeria. Despite sitting on nearly 40 billion barrels of proven oil reserves and $48 billion worth of investment opportunities in the oil and gas sector, Africa’s largest economy is mired in problems. Kenneth said: “Its Nigeria’s abundant commodity resources that makes it so big. But its Nigeria’s Government that keeps it from getting bigger and richer.” When stories of this nature run in the international media we must sit up and take notice. In this instance we must look at the actions our regulators who are Government bodies take, and ask ourselves are the legal, are they correct, are they the actions of a progressive nation, do the perpetuate the negative picture that the international media, business and investing community already have of our country?

    Looking at it practically, the SEC’s actions could be likened to a teacher who has informed a student that he has performed woefully in his exams and will be required to repeat without detailing the subjects, where errors were made and the associated grades to enable the student know what subject areas to improve on. The NSE owes it to the shareholders, the general public and to the world at large to do things the right way. The SEC owes it to the country to show that we are not regressing, that as a regulator they are fair, transparent and fully focused on protecting the Nigerian capital market.

    Speaking on the damage done to the brand since the inception of the investigation, the Chief Finance Officer, Oando PLC, Olufemi Adeyemo said: “The damage cannot be quantified. We require credit to run our business and this has come at an extra cost, one that we would ordinarily not have incurred. Despite these challenges we’ve kept making milestones and running the business as usual.” It would interest you to note that the damage, financial and reputation, caused by the SEC fiasco is worth significantly more than the alleged infractions leveled against the company and its management team. Making a public spectacle of the company, its management team and eroding shareholder value is not acceptable by any standards – especially because some of this damage is irreversible. At the end of the day, this is a public listed company, so any erosion of value affects the general public who are shareholders. According to a social media user “If the SEC think removing Wale and Mofe is the solution, then they don’t understand the tie between the company and its founders. Removing them equates to taking the Company down and our money with it.”

    Nigeria as the giant of Africa, should lead by example, we must make a concerted effort to change the perception of Nigeria and Africa. As a nation we must align our operations with global standards and like the developed world be deliberate in building home grown businesses as opposed to tearing them down. Businesses such as Oando have contributed immensely in boosting the Nigerian capital market index since its inception as well as attracting FDIs into the country. The company’s contribution to the economy under the leadership of the said management who have been advised to resign, cannot be overlooked. Oando’s management have weathered every storm known to the industry to ensure the business remain viable, the company’s recovery from the monumental loss following the release of its full year end 2014 results should be applauded because not many companies with such a loss and a challenging environment would have survived. Today the company boots 3 years of profits.

    This is not the time for corporates and the likes to be silent. With the increased awareness on rule of law and justice, it is time to speak up against such injustice. Silence would mean giving in to the norm which shouldn’t be the case and as history has shown us, this will definitely repeat itself except measures are taken to correct it. The SEC should, as the watchdogs of Africa’s biggest economy, do the right thing and engage companies that they are investigating, this should be the minimum standard. Today it is Oando tomorrow it will be you.

  • Oando, others raise funds for Northeast

    The United Nations (UN) Nigerian Humanitarian Fund- Private Sector Initiative (NHF-PSI) led by Adewale Tinubu, Group Chief Executive of Oando PLC, is raising funds and awareness for the Northeast crisis.

    The body has raised $83 million in contributions and pledges, thanks to the generous support of donor countries; Sweden, Germany, the Netherlands, Denmark, Belgium, Norway, Ireland, Switzerland, the Republic of Korea, Iceland, Canada, Spain, Luxembourg, the Arab Gulf Program for Development, Malta, Azerbaijan and Sri Lanka. The NHF provides an opportunity for donor countries to pool their contributions to deliver a stronger collective response based on the realization that the Government of Nigeria cannot fight this battle alone.

    To amplify humanitarian assistance, the UN NHF-PSI initiative was launched in November 2018 at the Oando Wings Event Space.  The NHF-PSI is a groundbreaking global initiative and a first for the UN, that will see the private sector join donor countries in pooling donations and resources together to create a more collaborative and effective response to the ongoing humanitarian crisis in North-east Nigeria.  The NHF-PSI is made up of fourteen leading private sector companies in different sectors of the economy. Setting the pace for the oil and gas industry, is indigenous leader, Oando PLC, whose GCE serves as the Secretary of the Steering Group of NHF-PSI as well as Seplat Petroleum. In the banking sector, Zenith Bank, Eco Bank, First Bank and Access Bank have keyed into the project with the Chairman of Zenith Bank, Jim Ovia, serving as Co-Chair of the Steering Group. In the FMCG sector you have the likes of Nestle and Unilever, other companies include the Nigeria Economic Summit Group (NESG) whose past chairman Kyari Bukar is also a Co-Chair of the Steering Group, and Templars Law, who have all elected to ‘Invest in Humanity’ as NHF-PSI founder donors and act as advocates proactively raising awareness of the plight of Nigerians in the North-east. The NHF-PSI is founded on the premise that Nigeria’s private sector not only cares profoundly for its nation’s most vulnerable, but also possesses the vision, resources and natural problem-solving ability to reduce it on an unprecedented scale if harnessed into collective action.

    To assess the situation firsthand, on May 14, 2019, the GCE of Oando led a delegation that included Herbert Wigwe, Managing Director of Access Bank andKyari Bukar on a  tour of two IDP camps in Maiduguri, Borno. Also a part of the tour and representing the United Nations were Edward Kallon, United Nations Humanitarian Coordinator for Nigeria and Edem Wosornu, Director, Office for the Coordination of Humanitarian Affairs (OCHA). The objectives of the tour was also to raise awareness of the plight of the millions of people in the North-east, and more directly galvanize a new wave of donor support for the initiative from businesses and individuals across the country.  In addition to visiting the IDP camps the delegation also paid a courtesy visit to the Governor.

    Tinubu said: ”This initiative is about Nigerians helping each other. Today, I have witnessed some of the most vulnerable people; women and children in the most dire circumstances. Having seen the magnitude of their humanitarian needs it is obvious that it is not a task that the government or any one agency can take on alone.”

  • Oando nets N4.6b in three months

    Oando Plc started the 2019 business year on a strong footing as the indigenous energy group recorded double-digit growths in top-line and bottom-line earnings in the first quarter. Net profit rose by 11 per cent to N4.6 billion in the three-month period, raising prospects that the company will sustain its consecutive growth in recent years. Oando recently released its full-year results for 2018, its third consecutive year of net profitability.

    Key extracts of the interim report and accounts of Oando for the three-month period ended March 31, 2019 released at the weekend at the Nigerian Stock Exchange (NSE) showed that turnover rose by 12 per cent to N168 billion in first quarter 2019 as against N150.6 billion in first quarter 2018. The company’s production had increased by 11 per cent from 39,556 boe per day in first quarter 2018 to 43,745 boe per day in March 2019. Operating profit rose by 15 per cent from N14.9 billion to N17.1 billion while profit after tax increased by 11 per cent from N4.2 billion to N4.6 billion. The balance sheet also showed continuing decline in total group borrowings, which declined by five per cent to N200.9 billion

    Chief Executive Officer, Oando Plc, Mr Wale Tinubu said the first quarter results reflected the progress made over the last few quarters and provided an indication of expectation for the year.

    “Now that our debt profile is down by 78 per cent from $2.5 billion as of December 2014 to $558 million currently, and our de-leverage program is 90 per cent complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity,” Tinubu said.

    He noted that with ICE Brent Crude Oil price currently at a decent level of $74.48 per barrel, the company’s efforts will be geared towards increasing its production to sustain profitability and position itself on the path to resumption of dividend payment to shareholders.

    Oil prices have recovered to over $74 per barrel as at the end of April 2019 after reaching a low of just over $50 per barrel at the end of 2018.

    “We expect prices to remain at their current levels in the near term. As a business, our focus will be largely on driving profitability via growth in our upstream business and achieving further reduction of borrowings,” the company stated.

    In the upstream, Oando said it will pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence.

    According to the company, it will also continue to work with its partners to achieve cost optimization on Joint Venture operations, ensuring the gains from higher revenues are not lost to increasing operating costs.

    Oando added that its trading business’s primary focus will be geared towards growing existing market share in Nigeria while leveraging on its relationships with international financiers.

  • Oando, First Bank, others receive PEBEC awards

    Vice President Yemi Osibanjo (SAN) has presented Presidential Enabling Business Environment Council (PEBEC) recognition award to Oando,  FirstBank and other private companies. The awards ceremony was held at the State House Banquet Hall,  Abuja. The firms were recognised for their support of PEBEC initiative.  The event marked the second annual PEBEC awards ceremony.

    PEBEC was set up in July 2016 by President Muhammadu Buhari to remove critical bottlenecks and constraints to doing business in the country. It was also to drive reforms to make the country a progressively easier place to do business and thrive.  PEBEC is  inter-governmental and inter-ministerial chaired by  Prof Osinbajo. It comprises 10 ministers, the Head of the Civil Service of the Federation, the Governor of the Central Bank of Nigeria (CBN), representatives of Lagos and Kano state governments, the National Assembly and the private sector.

    In a thought leadership piece by Oando Group Chief Executive, Wale Tinubu published in 2018, he said: “We at Oando, have always been firm believers in the African proverb, ‘If you want to go fast, go alone. If you want to go far, go together’, and every step of the way, we have approached and tackled each challenge by collaborating with private sector partners and the Government where necessary.”

    Oando was the first private company to enter gas distribution and pioneered gas distribution in the Greater Lagos area with the aim of spurring industrialisation. Some of its notable gas projects include the development of 260km gas pipeline grid across Nigeria, Alausa and Akute Independent Power Plants and a Compressed Natural Gas plant, offering  clean and affordable energy solutions which equate to significant cost advantages for industries across the country.

  • Oando finalises N14b Axxela divestment

    •focuses on Dollar businesses

    Oando Plc yesterday announced completion of divestment from its midstream affiliate, Axxela Limited to Helios Investment Partners in a deal valued at $41.5 million, about N14 billion. Oando sold Axxela, formerly known as Oando Gas and Power, to enable it concentrate on its upstream Dollar-based business. Helios Investment Partners is a leading private equity firm with a focus on investments in Africa.

    The sale of Oando’s 25 per cent residual interest in Axxela is the completion of a divestment initiative that began in 2016.  In December 2016, Oando completed the $115.8 million 75 per cent partial divestment of the then Oando Gas & Power to Helios.

    Oando has said that net proceeds from the divestment will be used to partially prepay its Medium Term Loan (MTL) which it took in June 2016 following the global oil downturn. The oil downturn had sparked a debt crisis with companies barely breaking even and struggling to survive. Surviving players had to evolve their business model, diversify their portfolios and imbibe more financial prudence and discipline to ensure survival in a high or low price era.

    Oando’s divestment of its 25 per cent residual interest in Axxela to Helios was part of strategic initiatives aimed at maintaining the trajectory of aggressive debt reduction, portfolio optimization and ensuring that the business remains viable.

    The company had in 2016 commenced the implementation of a three-pronged restructuring plan of growth through its upstream business; deleverage through disposal of $350 million in assets value and a return to profitability. Through open dialogue with ten leading financial institutions in Nigeria, the company agreed to a medium term restructuring loan facility of N94.6 billion, about $311 million as part of the strategic initiatives.

    Oando also in 2016 successfully completed a $210 million recapitalization of its downstream business, with a consortium of Helios and the Vitol Group, the world’s largest independent trader of energy commodities.

    Group Chief Executive, Oando Plc, Mr. Wale Tinubu said the completion of the Axxela divestment signifies another win for the company as it reinforces Oando’s ability to create value that can be monetized and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria.

    According to him, Oando’s exit from Axxela signifies the company’s ability to optimise value from a non-core business activity and reinforces its capability in building strong businesses that attract international investors and create real value.          “This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses,” Tinubu said.

    He noted that Oando pioneered the development of Nigeria’s foremost natural gas distribution network which has grown to become the largest private sector gas distributor in Nigeria, creating a lasting impact on both the sector and the Nigerian economy.

    He pointed out that the company’s exit from Axxela was not a departure from the gas business adding that the company will continue to maintain significant presence in the midstream as well as grow its gas aspirations through its upstream gas assets in its NAOC Joint Venture wherein it has four gas projects within the NNPC’s Seven Critical Gas Development Projects (7CGDPs).  The four gas projects are responsible for almost 50 per cent of the 42 TCF that will be delivered by the seven 7CGDPs by 2020.

    The NAOC Joint Venture is made up of NNPC, Nigerian Agip Oil Company and Oando and it is the biggest upstream contributor to the domestic gas market through a current daily production of circa 1 billion scf of gas.

    Tinubu noted that the African business environment is dynamic and the only way to remain ahead of the curve is by breaking new terrain, being innovative and ultimately looking for opportunities to leapfrog.

    “At Oando, we try to emulate this, we believe we are energy pioneers with an ambition to consistently tackle risks and evolve opportunities to positive commercial outcome while maintaining global standards. The good news is, there are still many parts of the energy ecosystem especially Nigeria that have been left unexplored and we will continue to set the tone in transforming Nigeria and ultimately Africa’s energy future,” Tinubu said.

    Chief Executive Officer, Axxela Limited, Bolaji Osunsanya said the company remains proud of its pedigree as an Oando portfolio company even as continues to position itself as the preferred and fast-growing gas and power portfolio across sub-Saharan Africa.

    “As we commence a new journey, our audacious growth initiatives across Nigeria and the sub-region will leverage our industry expertise, experience, and longevity; while our affiliation as a full-fledged Helios company will improve our access to capital,” Osunsanya said.

     

     

  • Oando to raise fresh capital, cut debt

    The Chief Executive Officer, Oando Plc, Adewale Tinubu  yesterday said the oil firm is planning to raise fresh capital over the next two years and repay debt incured during the acquisition of Conoco Phillips Nigeria assets.

    Oando has transformed itself in the past few years from a fuel retailer to oil producer and now competes with multinationals such as Shell and ExxonMobil, but its growth has been largely built on debt.

    It bought Conoco Phillips’ Nigeria assets for $1.5 billion in 2013, but high financing costs coupled with lower oil prices hit profit, leaving it unable to repay its debt. It has posted losses including a record $1.10 billion loss in 2014.

    According to Tinubu, Oando has paid over 77 per cent of the acquisition debt and plans to pay-off the rest in 12 months, which would allow it to resume dividend payments. The firm would then be left with a total debt of $300 million.

    He said Oando would continue to pursue acquisitions as multinational oil companies sell assets, adding that the firm would take on new deals after paying the debt.

    ExxonMobil is weighing the sale of its Nigerian oil and gas fields for up to $3 billion to focus on new developments in U.S. shale and Guyana, industry and banking sources said.

    “Our expectation is that over a four-year horizon we will no longer have long term debt,” Tinubu told Reuters by mail.

    The Central Bank of Nigeria (CBN) in 2016 gave lenders a deadline to reach a deal to resolve Oando’s debt issue, leading to a N94.6 billion loan restructuring including asset sales.

    Last week, Oando’s losses narrowed to N18.3 billion  ($59.8 million) for 2018 while its auditor Ernst & Young questioned its “going concern” status, saying its current liabilities were in excess of its current assets.

    Oando said it would reclassify some current liabilities as long-term liabilities to remedy its working capital by June and swap N27.5 billion of debt into equity, it said in a note to its 2018 accounts.

    It also said in its accounts that it plans to sell up to $200 million via a rights issue by October and cut its stake in its upstream unit to raise $275 million in 2020.

    Tinubu said he was confident with the capital raising initiatives and that over the next 24 months, Oando would raise funds as plans were far advanced.

    Shares in Lagos-listed Oando, which are down 86 percent from their peak of N33.47 in 2014, rose 3.2 per cent yesterday to value the company at N58.43 billion.