Oil marketing major Oando Plc has said it has commenced its proposed $300 million (N48.8 Billion) rights issue. This was disclosed in a statement issued by the Nigerian Stock Exchange (NSE).
This is coming on the heels of earlier suspension of the issue by the NSE an action, which was premised by an information received November 27, 2014 from Vetiva Securities Ltd, the Lead Stockbroker to the issue, that Oando Plc has not obtained a formal clearance of the offer documents and registration of the shares from the Securities and Exchange Commission (SEC),
Oando says trading in its rights which began on Wednesday, December 3, 2014 and will end on Wednesday January 14, 2015 and will take place simultaneously both in the NSE and the Johannesburg Stock Exchange (JSE) Limited.
“This offer was initially slated to close on Friday, 19 December 2014. Susbequently, however, Vetiva Securities Ltd, the Lead Stockbroker to the Offer, notified The Exchange that Oando Plc was yet to obtain a formal clearance of the Offer documents and registration of the shares from the Securities and Exchange Commission.
In reaction to this information, the NSE suspended the Rights Offer on 28 November 2014,” the statement indicated.
The oil marketing firm priced its rights at N22 per share through the issuance of 2,217,265,184 ordinary shares of 50 Kobo each.
Oando affirmed that the rights is on the basis of four new ordinary shares for every ordinary share of 50 Kobo each held as at the close of business on Friday, 25 July 2014 for those shareholders whose names appear on the Register of Members and transfer books maintained in Nigeria and shareholders whose names appear on the Register of Members and transfer books of the company which are maintained in South Africa as at the close of business on the Friday October 28, 2014.
Wale Tinubu, group chief executive officer (GCEO), Oando was quoted as saying, “We are pleased with the execution of our current strategy of GDP: Growth-Deleverage- Profitability: having experienced tremendous Growth in the Upstream business in terms of production a 1000 percent increase (current production of 50kboe/day), reserves and resources a 1500 percent increase (780mmboe).
The GCEO of the oil marketing company noted that deleveraging by a portfolio review and the ensuing divestment of less profitable assets and operations, for example the recent lucrative sale of the South Eastern Pipeline franchise for $250 million.
‘’Profitability in our continual quest for higher margin and superior rates of return on investments in the upstream, rather than scale in the downstream. We have launched our rights issue towards re-vitalizing our balance sheet in preparation for the landscape of growth opportunities in 2015, to ensure we maximise value and cash returns to our shareholders,” he said.
Oando further affirmed that the proceeds from the rights issue will be used for deleveraging of balance sheet via repayment of existing financial debt obligations and investment in working capital to replenish working capital lines utilised in the financing of the ConocoPhillips acquisition.
Also, Vetiva Securities Ltd, the Lead Stockbroker to the issue, has notified the Nigeria’s Exchange of its receipt of the formal clearance of the offer documents and registration of the shares from the SEC.
Source : Tribune