The Board of Directors of Oando Plc has received approval from shareholders for a N80bn Rights Issue.
The shareholders also approved the partial divestment of the firm’s midstream and upstream services businesses as was done with its downstream business in order to attract substantial capital to fuel its growth initiatives.
Oando, which is Nigeria’s largest indigenous oil and gas company and integrated energy solutions provider, reaffirmed its commitment to creating value for shareholders during its 38th Annual General Meeting held in Lagos on Monday.
The company outlined its growth strategies to for the extended period of lower oil prices to include aggressive debt reduction, financing through partial divestments, and further diversification into the higher margin upstream.
By ensuring a reduced overhead at the group level and to optimise performance, Oando said it was seeking to drive focused and independent subsidiaries, which could raise stand-alone capital to exploit clear market opportunities.
In 2011, the company received shareholders’ approval to divest part of its downstream business, which came to fruition in 2015 with the sale of 60 per cent economic rights and 49 per cent voting rights of the business to a joint venture consisting of Helios Investment Partners, the largest African focused private equity company, and Vitol, the world’s largest independent energy trader, for a total consideration of $461m.
The divestment, the firm said, would reposition it for a new era of investment, growth and profitability, while enabling the Oando Group to focus on its midstream and upstream ambitions.