By InvestAdvocate

Lagos (INVESTADVOCATE) – Oando Energy Resources (OER) on Thursday said Oando E&P Holdings Limited will acquire all minority shares of Oando Plc in OER, the company disclosed in an issuers notice to the Nigerian Stock Exchange (NSE).

OER said it has filed on SEDAR and is mailing a notice of meeting and management information circular in respect of a special meeting of shareholders scheduled to be held on Thursday, February 25, 2016 in Vancouver, British Columbia.

According to the firm, the documents present the reasons for the unanimous recommendation from OER’s board of directors that shareholders vote in favour of a special resolution to approve a proposed plan of arrangement with Oando Plc and Oando E&P Holdings Limited.

“As announced on December 22, 2015, pursuant to the arrangement, the purchaser will acquire all of the issued and outstanding common shares of OER (minority shares),” the notice said.

OER added that the record date for shareholders entitled to attend and vote at the meeting has been set at January 19, 2016. “The meeting will be held at the offices of Cassels Brock & Blackwell LLP, 885 W Georgia St., Suite 2200, Vancouver, British Columbia, V6C 3E8 at 10:00 (Vancouver Time) on Thursday, February 25, 2016,” the company added.

OER affirmed that as part of the transaction, the company has notified the TSX and applied for the delisting of the Common Shares upon completion of the arrangement. “In addition, in accordance with Section 720 of the TSX company manual, the company has applied to voluntarily delist the common share purchase warrants issued by the company from the facilities of the TSX upon completion of the arrangement and an exemption from the requirement for security holder approval of such delisting is available pursuant Section 604(f) of the TSX company manual because Oando Plc holds more than 90 percent of the common shares,” OER said.

The company further affirmed that other information on voting, including specific details of how to vote, can be found in the circular. “completion of the arrangement, including the delisting of the common shares  and warrants from the facilities of the TSX, will be subject to, among other things, approval by the syndicate of lenders in OER’s $450 million senior secured facility,” the company disclosed.

It said that copies of the arrangement agreement, the circular and certain related documents have been filed with Canadian securities regulators and are available under the company’s profile on the Canadian SEDAR website at www.sedar.com.

Shares of Oando at the close of today’s trading on the Nigerian bourse declined 2.26 percent to N3.90 per share from N3.99 traded the previous session.

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Oando Energy Resources Inc (OER) – a subsidiary of Oando Plc – a company focused on oil and gas exploration and production in Nigeria, has announced that it intends to complete a private placement to raise the sum of US$50,000,000. In addition, in connection with the Offering, OER intends to acquire a 5% interest in OML 131 in exchange for common shares of the Company (the “OML 131 Acquisition”).

The Offering

The Offering is expected to consist of 35,070,063 common shares of the Company (the “Common Shares”) and 17,535,031 common share purchase warrants (the “Warrants”) for gross proceeds of US$50,000,000 (each Common Share and half-Warrant, a “Unit”) at a price of C$1.57 per Unit. Each whole Warrant will entitle the holder thereof to acquire one common share of the Company at a price of C$2.00 per common share for a period of 24 months from the date of the closing of the COP Acquisition (as defined below). If, after a period of six months from the closing of the COP Acquisition, the common shares of the Company trade on the Toronto Stock Exchange (“TSX”) at a price greater than C$3.50 for a period of at least 10 consecutive trading days, the Warrants will expire on the date which is 30 days following the last day of such 10 consecutive trading days.

Closing of the Offering is subject to receipt of applicable regulatory approvals, including approval of the TSX. The issue price of the Units represents approximately an 11% discount on the market price of the Common Shares on the date the TSX received the Company’s request for price protection. Securities issued will be subject to a hold period, which will expire four months plus one day from the date of closing of the Offering.

It is anticipated that the proceeds of the Offering will be used by the Company to satisfy a portion of the purchase price for the proposed acquisition by the Company of the Nigerian upstream oil and gas business of ConocoPhillips (the “COP Acquisition”). The Offering has been negotiated at arm’s length. Should OER elect to issue Common Shares to Oando Plc, the 94.6% shareholder of the Company, prior to or concurrent with the closing of the Offering as repayment of all or a part of a convertible loan outstanding to Oando Plc, the Offering is not expected to affect control of the Company and no new insiders are expected to be created as a result of the Offering.

The OML 131 Acquisition  

In connection with the Offering, the Company intends to acquire a 5% interest in OML 131 from an investor in the Offering for a purchase price of US$5,000,000. The purchase price will be satisfied by the issuance of an additional 3,491,082 Units. The closing of the OML 131 Acquisition is subject to acceptance by the TSX and any requisite approvals from Nigerian regulatory authorities.

Assuming completion of the OML 131 Acquisition and the COP Acquisition, OER will own a 100% interest in OML 131.

Source: NSE

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