28 January 2015, Lagos – Oando Plc has reduced the price of its Rights Issue from N22.00 to N16.50, while it increased the volume of shares to 2.956 billion. The integrated oil company, which is listed on the Nigerian Stock Exchange (NSE) and Johannesburg Stock Exchange (JSE) said in a statement yesterday that the reduction in price was to reflect the current bearish condition of the Nigerian stock market.
Oando has embarked on the capital raising exercise with the intention of raising N48 billion from existing shareholders by issuing 2.217 billion shares in a ratio of one for every four shares at N22 per share.
However, the market has suffered significant decline in the last three months. And in order to reflect the reality of the current market conditions, the company has to change in the offer terms of the Rights Issue.
“The initial offer size, price and ratio of 2,217,265,185 ordinary shares of 50 kobo each at N22.00 per share (1:4) has been updated to a new offer size, price and ratio of 2,956,353,579 ordinary shares of 50 kobo each at N16.50 per share (1:3).This revision was required to better align the terms of the Rights Issue with current market conditions, given the 28 per cent fall in the NSE All Share Index over the last 3 months,” Oando said.
The company explained that an application was made to the Securities & Exchange Commission to change the offer size, price and ratio of the issue, which was approved.
“Shareholders who have already taken up their rights under the initial offer terms are not required to take any further action. The change in the offer price and the share exchange ratio imply that the consideration to be paid for rights pertaining to existing holdings remains unchanged under both scenarios.
“The issue price has been revised to the issue ratio to one new ordinary share for every three ordinary shares of 50 kobo each.
“Accordingly, each affected shareholder will be allotted additional shares, representing the appropriate increment over and above the number of Rights they previously accepted with no update to the amount of the consideration,” the company said.
– This Day
