By InvestAdvocate
Lagos (INVESTADVOCATE)-Oil marketing major, Oando Plc plans to raise N80 billion via a rights issue as contained in the company’s 38th annual general meeting (AGM) notice.
Similarly, Oando seeks to increase its issued share capital by up to N40 billion through the issuance of shares out of the unissued share capital of the company for the purposes of corporate restructuring, settlement of debts, employees and executive compensation all amounting to N120 billion.
Also, the company seeks approval for the divestment of its downstream business and to increase its authorised share capital from N7.5 billion to N15 billion.
The N80 billion rights is resolution seven (7); while the N40 billion is through the issuance of shares out of the unissued share capital of the company is contained in resolution eight (8) in the special business of the notice.
Further to the approval of shareholders given at the 32nd AGM of the company held on July 30, 2009 and the 37th AGM of October 27, 2014, Oando will ask the shareholders to authorise the company’s Board to “reorganise and/or divest any and/or all of the company’s shareholding and investment in the downstream business by way of sale, transfer and/or any other form of disposition” which the directors believe is the best interest of the company.
The oil marketing major says the shareholders hereby waive their pre-emptive rights to any unsubscribed shares under the rights issue in the event of an under-subscription.
Also, the integrated oil company is seeking approval as part of its special resolution to divest any and/or all of the Oand’s shareholding and investments in the Energy Services business by way of sale, transfer and/or any other form of disposition, which the directors resolve to be in the best interest of the company subject to the approvals of relevant regulatory authorities.
The company early December 2014 did a $300 million (N48.8 Billion) rights issue which took place simultaneously both in the Nigerian Stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE) Ltd.
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.
This is coming on the heels of N183.89 billion loss posted by the firm in its 2014 audited reported which analysts and stakeholders say was awful by all standards.
Pretax profit for the audited period ended December 31, 2014 declined 24, 121.5 percent to N171. 32 billion from N713.21 billion recorded a year ago.
Similarly, profit after tax (PAT) also dipped woefully by 13, 264.1 percent to N183.89 billion from N1.38 trillion reported the same period of 2013.
Also, revenue inched down from N449.87 billion in 2013 audited year end to N424.67 billion; showing a decrease of 5.6 percent, the company said in a filing with the Nigerian Stock Exchange (NSE).
Wale Tinubu, group CEO of Oando early this month while trying to explain the rationale behind the loss said with global upstream players forced to record significant reductions in the fair value of their asset portfolios in the last 10 months, “we are no exception,” he said.
According to him, this led to us accepting non-cash impairments and currency devaluation charges totaling N185.3 billion.
A breakdown of this he said is that N130.2 billion in the company’s exploration and production business as a result of lower oil prices leading to a reduced valuation of certain exploration and appraisal assets and under-lift receivables owed to us by NNPC.
Another was N36.4 billion in Oando’s Energy services business due to reduced drilling activity and reduced day rates accruable to our rig assets.
While N18.7 billion was due to the devaluation of the naira, which generated a significant foreign exchange loss as the company imported in dollar denominations and recovered costs Nigeria’s local currency.
At the close of Tuesday’s trading on the Nigerian bourse, share price of the company dipped 4.55 percent to N7.35 kobo from N7.70 traded the previous session.
