The company said in a statement that it plans to hold the shareholders meeting on February 18, adding that N50 billion of the amount will be offered to existing shareholders through a rights issue.
The capital raising will increase the authorized share capital from N5 billion to N7.5 billion.
This comes barely a month after the company offered N30.75 billion in shares to help it fund the acquisition of ConocoPhillips’ assets in Nigeria.
Once concluded, the transaction will substantially boost Oando Energy Resources’ (OER) operations, with circa production of 50,000boepd post acquisition, generating extensive growth in revenue and profitability.
Commenting on the capital raise, the CEO, Mr. Wale Tinubu, said, “As we contemplate our world post the acquisition of Conoco Phillips (COP) Nigerian business unit, which will undoubtedly provide significant growth in size and scale in our upstream business, our mature mid-stream and downstream units continue to retain dominant positions in their market space whilst not requiring material equity infusion.
“In our bid to maximise long term shareholder value, it is necessary to optimise our balance sheet by funding our operations where necessary through equity as opposed to expensive sources of debt.”
The first facet of this long term plan will seek to raise further capital by way of rights of N50 billion expected to be concluded by end of Q2, 2014.
The company highlighted that the proceeds of thisrRights exercise will be utilizsd towards debt reduction and Oando’s immediate working capital needs, with none of the proceeds raised allocated to the closure of the COP acquisition. Oando has also indicated that it does not envision any additional equity issuance in 2014.
Tinubu further reiterated the company’s three pronged approach of transformation, debt reduction, and substantially increasing shareholder value.