A Review of the Nigerian Energy Industry

Oando converts $218.9m debt of Canadian unit to equity

Oando-logo11 July 2014, Lagos – Nigeria’s Oando Plc has converted a $218.9 million loan to its Toronto-listed unit, Oando Energy Resources, to equity. This is to increase its stake in the subsidiary by 1.6 per cent to 93.6 per cent, it said on Thursday.

The Oando had secured Nigerian government approvals last month to complete the deal which it had agreed last year with ConocoPhillips but was delayed several times due to problems raising funds.

Reuters quoted Oando to have said said the debt is part of a $1.2 billion facility it approved for its subsidiary in February to help finance the acquisition of ConocoPhillips Nigerian assets.

Oando said an aggregate principal amount of approximately $431,000,000 remains available to be drawn under the Oando Loan.

According to Oando, OER has issued 150,075,856 units (the “Units”) to Oando Resources Limited (“Oando Resources”), a wholly-owned subsidiary of Oando Plc, as repayment of amounts outstanding under the Oando Loan for a conversion price of C$1.57 per Unit.

Each unit consists of one common share of the company (a “common share”) and one-half of one warrant to purchase an additional common share at a price of CAD$ 2.00 per Share (each whole common share purchase warrant being a “Warrant”) for a period of 24 months from the date on which the Company closes the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips.

“The terms of the units, other than the denomination of the conversion price and exercise price in United States dollars, have the same terms as the Units issued to third party investors and Oando Resources on 26 February 2014,” Oando said.

It added: “Prior to the completion of the conversion, Oando Plc owned, and exercised control or direction over 527,887,867 common shares, representing approximately 92.0 per cent of the issued and outstanding common shares.”

As a result of the conversion, Oando Plc currently beneficially owns, or exercises control or direction over 677,963,723 common shares, representing approximately 93.7 per cent of the issued and outstanding common shares.

“Assuming exercise of the warrants and warrants previously issued to Oando Plc on February 26, 2014, Oando Plc would beneficially own, or exercise control or direction over 969,284,535 common shares, representing approximately 95.5 per cent of the company’s issued and outstanding common shares; however, Oando Plc is restricted from exercising any warrants that would result in its ownership of the company exceeding 94.6 per cent,” it said.

Meanwhile the Nigerian equities market returned to negative territory yesterday as the benchmark index depreciated by 0.08 per cent to close at 43,004.38 (this brings the year-to-date appreciation to 3.34%) relative to the previous day trading session closing figure of 43,039.42.



– This Day

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