Oando to Declare N11.7 billion Profit

Mr. Wale Tinubu,

Goddy Egene
Oando Plc  has projected a profit after tax of N11.741 billion for the year ended December 31, 2012, indicating jump of 240 per cent from the N3.446 billion reported in 2011.

Integrated energy firm, which is currently shopping for N54.6 billion from existing shareholders, said in its offer prospectus that shareholders would enjoy dividends of N3.184 billion for 2012.

Market analysts said that given the third quarter results of the company, in which it recorded N9.2 billion, the projected N11.741 billion might even be surpassed.

Oando Plc on December 28, commenced the process of raising N54.6 billion from the capital market via a Rights Issue of 4.548 billion ordinary shares to existing shareholders.
The offer, being made at N12 per share on the basis of two new shares for every one share already held, is expected to close on February 6, 2013.

Net proceeds of the offer would be used to repay part of N60 billion syndicated loan used to acquire upstream assets and swamp drilling rigs among others.

Specifically, the funds would be used to repay part of loan used to acquire upstream assets and swamp drilling rigs, part-financing of acquisition of upstream and midstream assets by Oando’s upstream subsidiary, Oando Energy Resources and investment in working capital to support increased level of business.

Speaking on the rights issue, Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said that with the capital raising exercise, the company was at the final stages in the execution of its overall strategy to increase its exposure to the upstream sector whilst reducing the dependence on the downstream.

“ In 2010 we raised N21.1 billion through a rights issue, it was a highly successfully event, as it closed 28 per cent oversubscribed and we look forward to a similar outcome in this exercise. We count on the consistent support of our shareholders to seize the opportunity to take up their rights and benefit from the higher margin value creation the upstream offers,” he said.

He added that the company was happy to announce the opening of its rights issue offering, in line with the corporate strategy for balance sheet optimisation and the financing of growth initiatives in the upstream sector.

“Pursuant to the recent signing of agreements by our affiliate OER with ConocoPhillips, to acquire their entire Nigerian asset base for $1.79 billion plus customary adjustments, OER will be transformed from a small size oil company to a midsize oil producer.

“The successful outcome of the rights issue will position Oando to increase value for shareholders in the upstream through focused portfolio growth in production, cash margins and improved returns on capital deployed. We count on the consistent support of our shareholders to seize the opportunity to take up their rights and benefit from the higher margin value creation the upstream offers,” he said.