A Review of the Nigerian Energy Industry

Oando divests 60% downstream equity for $461m

Kunle Kalejaye 01 July 2015, Sweetcrude, Lagos –
Oando Plc, an indigenous energy group, has agreed to divest 60 percent equity stake of its downstream business to HV Investments, HVI, for US$461 million.

Oando Oil's Managing Director Wale Tinubu.
Oando Oil’s Managing Director Wale Tinubu.
HV Investments is a joint venture owned by Helios Investment Partners and the Vitol Group.

A statement signed by Oando’s Head of Corporate Communications, Mr. Ainoije Alex Irune, explained that at the end of deal, HVI will own 60 percent of the special purpose vehicle, while Oando will hold a 40percent stake.

For local content reasons the voting rights structure is as follows – HVI and Oando will each have 49 percent voting rights and a Nigerian Helios Affiliate two percent.

Oando’s CEO, Mr. Wale Tinubu said the deal will help positioned the company’s downstream for a new era of investment growth, profitability adding that the divestment also enables the company to increase its focus on upstream and midstream businesses.

The total consideration of US$461.3 million will be funded by a US$276.8 million cash contribution from HVI and US$184.5 million in preference shares issued to Oando, subject to customary purchase price adjustments, including working capital and long-term debt.

“This transaction is an exciting development in Downstream West Africa.

“By working with Vitol, a global energy and commodities company, and the largest independent trader of energy products, and Helios, a premier Africa-focused private investment firm, we have repositioned Oando Downstream for a new era of investment growth, profitability, and this venture holds unprecedented opportunities for the business. Importantly, this divestment also enables us to increase our focus on our upstream and midstream businesses.

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