By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Oil marketing company, Oando Plc Wednesday announced it will increase its authorised share capital from N5.0 billion to N7.5 billion in the company’s forthcoming extra-ordinary general meeting (EGM) scheduled for February 18, 2014.
The company in a Statement to the Nigerian Stock Exchange (NSE) and made available to InvestAdvocate in Lagos Nigeria said on the recommendation of the directors and in accordance with Article 46 of the Articles of Association of the Company, it will increase the Authorized Share Capital of the Company from N5.0 billion to N7.5 billion.
The company said it will pass a resolution at the EGM to amend clause six (6) of the Memorandum of Association and Article three (3) of the Articles of Association respectively to reflect the new share capital N7.5 billion divided into N15 billion ordinary shares of 50 Kobo each.
The oil marketer said its seeking to raise additional capital of N250 billion via a rights issue, public offering, private/special placement or other methods.
Oando affirmed that with the acquisition of ConocoPhilips Nigerian business Unit, significant growth in size and scale in its upstream business, mature Mid-Stream and Downstream Units will continue to retain dominant positions in the market.
Also, the company said in its bid to maximize shareholder value, it is necessary to optimize its balance sheet by funding the company’s operations where necessary via equity as opposed to the more expensive debt, currently an average of 18% per annum in Naira and 8.5% per annum where dollar loans are secured.
According to Oando, the first of this long term plan will be the raising of further capital by way of Rights of N50 billion expected to be concluded by the second quarter (Q2) of 2014.
‘’The proceeds of this Rights exercise will be utilized towards debt reduction and the company’s immediate working capital needs, none of the proceeds raised will be allocated to the closure of the COP Acquisition, furthermore it does not contemplate any additional equity issuance in 2014,’’ Oando said.
