A Review of the Nigerian Energy Industry

Oando converts $98m loan to equity in subsidiary

Oando-logo25 August 2014, Lagos – Oando Plc has converted $98 million  loan to  its subsidiary listed in Toronto Stock Exchange (TSX), Oando Energy Resources (OER) to equity,  increasing its stake from 93.2 per cent to 93.8 per cent. Oando, in notification to the Nigerian Stock Exchange (NSE) on Friday  said the loan is part of the $1.2billion facility it gave to OER for the, explaining that $ 41 million of principal remains outstanding under the Oando Loan and an aggregate principal amount of approximately $ 292 million remains available to be drawn.

According to the company, OER has issued 68,144,115 units  to Oando Resources Limited , a subsidiary of Oando Plc, as repayment of amounts outstanding under the  loan at a conversion price of Canadian dollar$1.57 per unit.

“Each unit consists of one common share of the company and one-half of one warrant to purchase an additional common share at a price of CAD$ 2.00 per common share up until 30 July 2016, a 24 month period from which the company closed 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 previous tranches,” the company said.

Oando   explained that  prior to the completion of the conversion, it owned and exercised control or direction over  677,963,723 common shares, representing approximately 93.2 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 746,107,838 common shares, representing approximately 93.8  per cent  of the issued and outstanding common shares.

“Assuming exercise of the warrants and warrants previously issued to Oando Plc on previous tranches of the loan, Oando Plc would beneficially own or exercise control or direction over   1,071,500,708 common shares, representing approximately 95.6 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.

The $1.2 billion was used by OER to acquire the Nigerian assets of United States’ oil major ConocoPhillips by Oando Energy Resources (OER).
The acquisition, which will increase Oando’s production from about 5,000 barrels per day (bpd) to 50,000 bpd, will also give OER a number of onshore and offshore assets, and the access to these assets also partners it up with some of the industry’s leading major E&P companies.


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