*A company founded by a former Nigerian defence minister is now the biggest shareholder in the FTSE 250 company
20 October 2014, London – An oil and gas explorer founded by a retired Nigerian general has become the biggest shareholder in scandal-hit Afren.
South Atlantic Petroleum (SAPetro), led by former Nigerian defence minister General Theophilus Danjuma, has built a stake of almost 7.1pc in the Africa-focused company, stock exchange filings show.
Afren stock crashed 26pc at the end of July when the company revealed it had suspended its chief executive and chief operating officer, both of whom were eventually dismissed last week for “gross misconduct” following an investigation into “unauthorised payments”.
The Nigerian group first declared a 3.14pc Afren holding at the end of September, but the stake has now more than doubled. Analysts say it is either a simple bet on Afren’s share price, or a prelude to more active involvement in the company.
SAPetro and Afren both have operations in Nigeria and Madagascar, as well as elsewhere in Africa. The stake-building comes as Afren hunts for a new boss after the dismissal of founder Osman Shahenshah, the COO, and two other associate directors.
One institutional investor in Afren told the Telegraph that while there was “obviously a lot of disquiet and disappointment with the behaviour of certain individuals, we believe the underlying assets of the company are good and the job now is for the company to install an effective new management team and rebuild trust”.
Westhouse Securities analyst Jamal Orazbayeva said SAPetro could seek to influence the new management and Afren’s strategy.
“They obviously have an eye for the asset base”, which is “trading at a discount”, she said, adding that there was “always the possibility” of a takeover.
A spokesman for Afren declined to comment. SAPetro did not respond to requests for comment.
*Ben Martin – The Telegraph