Site icon MONEYINAFRICA

Oando Plc discloses plan to raise fresh capital

Oando Plc discloses plan to raise fresh capital

Wale Tinubu 2 Oando Plc is planning to raise fresh capital over the next two years. The money will be used to repay the debt used to acquire ConocoPhillips ’ Nigerian assets.

The company’s Chief Executive Officer, Wale Tinubu, disclosed this recently during an interview with Reuters . According to him: “Our expectation is that over a four-year horizon, we will no longer have long-term debt.” According to Tinubu, Oando Plc had paid over 77 percent of the acquisition debt and plans to pay off the rest in 12 months. This would then allow it to resume dividend payments.

He also stated that Oando Plc would be left with the total debt of $300 million.

Tinubu stressed that Oando ’s growth plan is to continue to pursue acquisitions as multinational oil companies sell assets, adding that he is looking forward to taking new deals after paying down debt. Oando’s debt profile

The group’s total borrowings for 2018 stood at N210.9 billion, an 11% decrease from FYE 2017 (N237.4 billion). In its upstream specifically, its borrowings reduced by 21% to $255.6 million compared to $324.6 million in FYE 2017.

Since FYE 2014, the Group has reduced its debt by 55% from N473.3 billion while its upstream borrowings have reduced by approximately 70% from $801.6 million in 2014 to $260 million (FYE 2018). Oando’s debt financing challenge

Oando has transformed itself in the past few years from a fuel retailer to an oil producer and now competes with multinationals such as Shell and ExxonMobil . But its growth has been largely built on debt.

The firm bought ConocoPhillips ’ Nigerian assets for $1.5 billion in 2013, but high financing costs coupled with lower oil prices hit profit, leaving it unable to repay its debt. It has posted losses including a record $1.10 billion loss in 2014. About Oando Plc

Oando Plc , through its subsidiaries, provides integrated energy solutions in Nigeria and internationally. The company operates through exploration/Production, and supply and trading segments.

Oando Plc is currently trading N4.50 on the floor of the Nigerian Stock Exchange (NSE).

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.
Exit mobile version