Tag: Otedola’

Forte Oil Plc Chairman Femi Otedola is set to sell his entire 75 per cent majority equity stake in the company in a deal estimated at about N25 billion.

Forte Oil yesterday confirmed that Otedola is selling his “full 75 per cent direct and indirect shareholding in the company’s downstream business”. The downstream business accounts for more than three-quarters of the Forte Oil Group, although the power generation business has consistently delivered higher margins.

Forte Oil’s share price rose by 9.84 per cent or N2.80 to close at N31.25 per share yesterday at the Nigerian Stock Exchange (NSE). The maximum daily allowable price change at the NSE is 10.0 per cent.

In a regulatory filing signed by Forte Oil counsel Mr. Akinleye Olagbende, Otedola is divesting his majority equity stake to Prudent Energy team, which will be investing through Ignite Investments and Commodities Limited.

According to the company, Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximize business opportunities in refining and petrochemicals. Otedola is a close friend of Alhaji Aliko Dangote, Africa’s richest man, whose multi-billion naira refinery is billed to commence operations within the next 25 months.

The divestment is expected to be concluded in the first quarter of next year subject to receipt of applicable regulatory approvals and material conditions.

The divestment is a major u-turn for Otedola who had earlier in May secured shareholders’ approval to divest the group’s upstream services and power generating businesses as well as its downstream business in Ghana in a restructuring aimed at streamlining Forte Oil’s operations to focus on its Nigerian downstream marketing business.

Otedola’s Zenon Petroleum and Gas Company Limited and Thames Investment Incorporated are the major shareholders in Forte Oil, a legacy company that was privatised by the Federal Government. Forte Oil was incorporated in December 1964 as British Petroleum and became African Petroleum under the nationalisation policy of the Federal Government in 1979.

While details of the transaction are still sketchy, market analysts estimated the 75 per cent divestment deal at about N25 billion, on a straight-line, market-based fair value estimate. Forte Oil has traded at highest and lowest market value of N74.5 billion and N21.74 billion in the past 12 months. It closed yesterday with a market value of N40.70 billion.

Forte Oil Group includes the downstream parent company and three subsidiaries-Forte Upstream Services Limited, AP Oil and Gas Ghana Limited, two wholly owned subsidiaries; and Amperion Power Distribution Company Limited, where Forte Oil holds 57 per cent majority equity stake. Amperion Power Distribution Company Limited holds the majority equity stake in the lucrative Geregu Power Plc.

Key extracts of the nine-month interim report and accounts of Forte Oil Plc for the period ended September 30, 2018 showed a group turnover of N123.33 billion. Gross profit stood at N18.98 billion. The downstream business accounted for N94.81 billion turnover and gross profit of N8.46 billion. The power business accounted for turnover of N24.4 billion and gross profit of N9.44 billion.

Key balance sheet items showed group total assets of N147.9 billion and total liabilities of N83.52 billion by September 2018, leaving shareholders’ fund at N64.38 billion. On segmental basis, the parent company’s standalone balance sheet showed total assets of N66.11 billion against total liabilities of N52.62 billion, leaving total equity of N13.5 billion by the close of business on September 30, 2018.

“We concluded on focusing our resources on our core competence, and streams of uninterrupted dividends for our shareholders,” Otedola had told shareholders in May 2018 while pushing for a group divestment plan.

Shareholders thus authorised the board of the company to sell its stakes in Forte Upstream Services Limited, Amperion Power Distribution Limited and AP Oil & Gas Ghana Limited. They mandated the board of directors to invest the net proceeds from the divestments in the downstream marketing business.

Otedola had said the restructuring was aimed at ensuring sustainable growth and returns to shareholders.

Underlining the rationale for the strategic business change, Forte Oil had said its decision to divest from upstream services and power generating businesses will boost its distributable earnings for the benefit of shareholders.

According to the company, following the significant changes in the oil and gas industry in recent years, only downstream operators with huge investments in both storage and distribution infrastructures can remain competitive and operationally efficient in the long run.

Forte Oil noted that that although the power business is profitable,  it has  huge receivables due from the Nigeria Bulk Electricity Trading Plc (NBET) and a significant portion of its distributed earnings is also utilised in servicing the acquisition debt finance.

The company said despite the significant resources deployed in the upstream services, the business has consistently contributed less than seven per cent  to the Group earnings in the last three financial years.

Similarly, its downstream subsidiary in Ghana has consistently declared losses after tax in the last three years and   has substantial bad and uncollectable trade debts as a result of negative economic conditions and currency devaluation in prior years.

“This divestment a will reduce finance cost in the Group significantly and increase distributable earnings for the benefit of the shareholders. The finance cost attributable to the businesses to be divested stood at N2.7 billion and N2.2 billion for the year ended 31st December 2016 and the year ended 31st December 2017 respectively. The proceeds of the divestment initiative will also enable your company to compete more favourably and achieve the planned expansion of the business for increased market share,” Forte Oil stated.

Forte Oil had in 2017 suspended a N20 billion new equity issue, after it had received regulatory approval. The company was also downgraded by Morgan Stanley Capital International (MSCI from its Main Frontier Markets Index, following the steep depreciation in share price that saw the oil company closing among the year’s top losers.

FORTE Oil Chairman Mr. Femi Otedola yesterday turned the sod of the Engineering Faculty of Augustine University Ilara (AUI), Epe with a promise that funds had been made ready to build a wing of the building expected to be finished in the next two years.

Otedola said he considered the project as spiritual and worthwhile instead of building himself a new home or buying another private jet.

The son of the former governor of Lagos State, Sir Michael Otedola, said he got a lot of pressure from his mother, Lady Doja, to do something for the university in his father’s memory.

“I remembered 10 years ago, Mama said to me that we should do something for my father in the university.  But then oil prices crumbled and I lost N200 billion.  Now fortunately, by the special grace of God, I have paid all the debts, and the business grew again.

“My father was very passionate about a university being built in Epe because he was very passionate about education. Rather than spend my money on building more houses or buying a jet for myself, I decided to spend the money to support this laudable cause by the Lagos Catholic archdiocese through the Augustine University,” he said.

Lady Otedola, on her part, said she was happy at the turn of events, especially her children’s involvement in a project her husband was passionate about and prayed she would be alive to witness the inauguration of the building.

She said he would be happy about the project, saying: “I can see my husband looking at us smiling.”

The proprietor of the university and the Catholic Archbishop, Diocese of Lagos, Dr. Adewale Martins, thanked the Otedola family for its intervention in the university and many other projects of the Catholic Church.

“This is not the first from the Otedola family.  We are trying to build a home for priests when they retire and that piece of land was donated by the family in 1994. We will hold you up in our prayers,” he said.

Speaking about the importance of the building, Martins noted: “With this engineering faculty, we’re delighted that it’s taking off because it is one area that we think with the kind of technological development that Nigeria needs, we can begin to find the realisation within that faculty – that’s not to say that the arts and the social sciences are not making contributions. We have had those contributions for many years. We are truly delighted that we have this beginning.”

A member of the fundraising committee, Chief Sena Anthony, said Otedola had already dropped N80 million for the building and promised to go beyond just the first wing.

“For this project so far, he has given us N80 million and he said this dream will not stop with one block.  His dream is to go further.  He said as the block goes up, he would bring his friends to see so that they can participate,” she said.

The university’s Vice-Chancellor Prof. Steven Afolami thanked the family for accepting the project.

 

Survivors of tanker explosion that occurred on Otedola Bridge last night how some people got burnt in the inferno.

In his post on a social media, Instablog, Kay Baba described the sight as devastating.

Baba said he saw people burning near him.

He said: “Thank God for life o! I just witnessed tanker explosion on Otedola Bridge. About 50 cars are in flames. I am still in shock. I saw the tanker exploded. The smell, the heat and cars ramming into the ditch while trying to escape. Lives have been lost to the raging fire.

“Believe me, pictures cannot do justice to what I saw – the tanker and the cars burning. The 14-seater and 18-seater busses I saw burning with some people inside. I am still trying to count the number of lives gone.”

Another eyewitness, whose car got burnt in the explosion, said he saw a school bus with kids burning.

“When I saw the tanker fell and fuel gushing out, I quickly took my phone and left. I told a man parked behind him to run out, but he refused,” he said.

The Nigerian businessman and chairman of Forte Oil Plc, Femi Otedola, has joined the league of very-high-net-worth personalities on the social media platform, Twitter.

His Twitter handle is @realfemiotedola.

Making the official announcement of his joining the social media platform yesterday, Otedola said: “I am pleased to announce that I have finally joined Twitter.”

According to the oil and gas mogul, although joining Twitter might have come a bit late, he believes it is the right step to take.

“The importance of Twitter as a social utility cannot be overemphasized.  I understand I am a bit late to the party but better late than never,” he stated in a terse statement.

Otedola also disclosed that he had to take lessons from his daughters on how to use Twitter before finally deciding to engage with the world on the social media platform.

He continued: “After receiving some lessons from my daughters, I decided it was time to connect with the world on a personal level. I look forward to joining the conversation, tweeting and retweeting a lot about the issues that are most dear to the populace and, of course, keeping you updated on my activities. You can follow my handle @realfemiotedola.”

As of the time of filing this report, Otedola had at least 1,633 followers and currently following his daughters, @cuppymusic, @shestolani, and @jtofashion.