Oando Plc has concluded plans to raise N54.5bn from the Nigerian capital market through a Rights Issue exercise.
The company is quoted in the oil and gas sector of the Nigerian Stock Exchange, as well as the Johannesburg Stock Exchange of South Africa.
A statement by the company on Thursday, noted that the company received regulatory approval for its Rights Issue from the Securities & Exchange Commission on December 12, 2012, and also held its Completion Board Meeting on the December 19, 2012.
According to the statement, Oando plans to raise N54.57bn through the issuance of 4.54 billion ordinary shares of 50 Kobo at N12.00 per share.
It noted that the Rights Issue exercise would open on Friday, December 28, 2012 and close on Wednesday, February 6, 2013. Vetiva Capital Management Limited is the Lead Issuing House, while FBN Capital Limited and FCMB Capital Markets Limited will act as Joint Issuing Houses.
The statement noted that the company embarked on the issue to raise funds to pay back some of the loans it used to finance some key projects as well as future investment plans.
It said, "The proceeds from the Rights issue will be used for the part-repayment of N60bn syndicated loan used to fund the acquisition of upstream assets and swamp drilling rigs.
"Also, it will be used for the part-financing of acquisition of upstream and midstream assets by Oando's Upstream subsidiary, Oando Energy Resources as well as investment in working capital to support increased level of business."
The statement quoted the Group Chief Executive Officer, Oando, Mr. Wale Tinubu, as saying that shareholders of the company should take up their rights, to boost the company's resources.
He said, "Now that we have obtained the necessary regulatory approvals for our capital raise we are at the final stages in the execution of our overall strategy to increase our exposure to the upstream sector whilst reducing the dependence on the downstream.
"In 2010 we raised N21.1bn through a Rights Issue, it was a highly successful event, as it closed 28 per cent oversubscribed and we look forward to a similar outcome in this exercise. We count on the consistent support of our shareholders to seize the opportunity to take up their rights and benefit from the higher margin value creation the upstream offers."
