Multinational oil company, Oando Plc, is to delist from the Nigerian Exchange Limited 31 years after it was listed as a public company in February 1992.
This follows plans by its core investor, Ocean and Oil Development Partners Limited (OODP), to acquire the shares of all minority shareholders as earlier hinted nine months ago.
The firm in a statement Thursday signed by its chief compliance officer/company secretary, Ayotola Jagun, said if the conditions of the transaction with OODP, its core investor, are satisfied, the company will become a private company.
Oando was listed on the Nigerian Stock Exchange — now Nigerian Exchange Limited (NGX) — in February 1992, as a public company.
If the offer is completed, the oil firm will be subsequently delisted from NGX and Johannesburg Stock Exchange (JSE) and re-registered as a private company, according to the statement.
The organisation said the transaction will be executed through a scheme of arrangement, in accordance with section 715 of the Companies and Allied Matters Act (CAMA) 2020, and other applicable laws and that OODP is proposing to acquire the minority shares at N7.07 per share.
“Under the scheme, each scheme shareholder shall be entitled to receive the sum of N7.07 in cash or its equivalent in South African Rand (ZAR) for every ordinary share held by the qualified scheme shareholders at the effective date of the scheme (scheme consideration),” the statement reads.
“The proposed scheme consideration represents a 58 percent premium to the last traded share price of Oando on 28 March 2023, being the day prior to the date of submission of the scheme application to the Securities and Exchange Commission (SEC).”
Oando said it has applied to the Securities and Exchange Commission (SEC) for a “no objection” to the transaction, adding that it will seek approval of shareholders at a court-ordered meeting.
“Please note that the effectiveness of the scheme is subject to the approval of the shareholders of Oando at the court-ordered meeting of the company, as well as the sanction of the federal high court,” the organisation said.
“The terms and conditions of the transaction will be provided in the scheme document which will be dispatched to all shareholders following the receipt of an order from the federal high court to convene a court-ordered meeting
The board of Oando Plc had said in June 2022 that it might seek voluntary delisting of its shares from the Nigerian Exchange Limited (NGX) if ongoing plans to buy out the 42.63 per cent minority shares by OODP were approved by all the minority shareholders at a court-ordered meeting.
The company said the decision arose from a court ruling following a petition filed on March 25, 2021, at the Federal High Court, Lagos by 14 shareholders of Oando. The shareholders, it said, held a total of 299,257,869 shares, on behalf of Oando’s minority shareholders led by Venus Construction Company Limited.
The suit was brought under sections 353, 354 and 355 of the Companies and Allied Matters Act 2020 (CAMA), with OODP and Oando listed as first and second respondents respectively.
The statement put OODP’s shareholding in Oando at 57.37 per cent while the minority shareholders own 42.63 per cent.
“The petitioners requested that the court order the buyout of their entire shareholding either by OODP or Oando,” based on their belief that such would be in their best interest as well as that of the company.
“In its cross-petition, OODP had stated its willingness to buy out all the minority shareholders of Oando via a court-ordered Scheme of Arrangement (pursuant to Section 715 of the Companies and Allied Matters Act 2020) to be approved by Oando’s shareholders at a general meeting.”
Analysts say huge losses had forced the multinational oil company into voluntary delisting on the NGX The company has been fraught with shareholders’ dispute, which stalled its Annual General Meeting (AGM) and affected lots of investors.
The matter was compounded by losses encountered during the 2020 pandemic, and it has been downhill from thereon.
Oando Plc recorded an increase of more than a half in turnover for 2021, according to its unaudited earnings report recently.
The increase helped the oil driller halt its two-year run of losses that began in 2019, the report showed.
A messy shareholder dispute involving an indirect shareholder, Ansbury Investment Inc, had prompted SEC to bar the firm from holding annual general meetings, making it impossible to release its financials for three years until last June (2022).
At the heart of the conflict were loans granted to the shareholder, which forced Oando to make a huge impairment allowance that tipped the company into a loss after tax of N207.1 billion in 2019 and N140.7 billion in 2020.
Revenue for 2021 grew to N722.4 billion from N477.1 billion, while other operating income slowed to N36.7 billion from N43.6 billion as the company recorded a loss on fair value on commodity options in contrast to a gain one year earlier.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
