Business
Oando Plc will Withdraw from the NGX after 31 Years.
Oando Plc will Withdraw from the NGX after 31 Years.
Oando Plc, a multinational oil business that was first listed as a public corporation in February 1992, is to delist from the Nigerian Exchange Limited after 31 years. NewsReport gathered.
This is in line with plans by its main shareholder, Ocean and Oil Development Partners Limited (OODP), which were first hinted at nine months ago, to buy all minority shareholders’ shares.
In a statement Thursday signed by its chief compliance officer and company secretary, Ayotola Jagun, the firm said if the conditions of the transaction with OODP, its core investor, are satisfied, the company will become a private company.
Oando was listed on the Nigerian Stock Exchange (now Nigerian Exchange Limited (NGX)) in February 1992 as a public company.
If the offer is completed, the oil firm will be subsequently delisted from NGX and the Johannesburg Stock Exchange (JSE) and re-registered as a private company, according to the statement.
The organisation said the transaction will be executed through a scheme of arrangement, in accordance with Section 715 of the Companies and Allied Matters Act (CAMA) 2020 and other applicable laws, and that OODP is proposing to acquire the minority shares at N7.97 per share.
“Under the scheme, each scheme shareholder shall be entitled to receive the sum of N7.97 in cash or its equivalent in South African Rand (ZAR) for every ordinary share held by the qualified scheme shareholders at the effective date of the scheme (scheme consideration),” the statement reads.
“The proposed scheme consideration represents a 58 percent premium to the last traded share price of Oando on March 28, 2023, being the day prior to the date of submission of the scheme application to the Securities and Exchange Commission (SEC).”
Oando said it has applied to the Securities and Exchange Commission (SEC) for a “no objection” to the transaction, adding that it will seek the approval of shareholders at a court-ordered meeting.
“Please note that the effectiveness of the scheme is subject to the approval of the shareholders of Oando at the court-ordered meeting of the company, as well as the sanction of the federal high court,” the organisation said.
“The terms and conditions of the transaction will be provided in the scheme document, which will be dispatched to all shareholders following the receipt of an order from the federal high court to convene a court-ordered meeting.”
The board of Oando Plc said in June 2022 that it might seek voluntary delisting of its shares from the Nigerian Exchange Limited (NGX) if ongoing plans to buy out the 42.63 percent minority shares by OODP were approved by all the minority shareholders at a court-ordered meeting.
The company said the decision arose from a court ruling following a petition filed on March 25, 2021, at the Federal High Court in Lagos by 14 shareholders of Oando. The shareholders, it said, held a total of 299,257,869 shares on behalf of Oando’s minority shareholders, led by Venus Construction Company Limited.
The suit was brought under Sections 353, 354, and 355 of the Companies and Allied Matters Act 2020 (CAMA), with OODP and Oando listed as first- and second-respondents, respectively.
The statement put OODP’s shareholding in Oando at 57.37 percent, while the minority shareholders own 42.63 percent.
“The petitioners requested that the court order the buyout of their entire shareholding either by OODP or Oando,” based on their belief that such a buyout would be in their best interest as well as that of the company.
“In its cross-petition, OODP stated its willingness to buy out all the minority shareholders of Oando via a court-ordered scheme of arrangement (pursuant to Section 715 of the Companies and Allied Matters Act 2020) to be approved by Oando’s shareholders at a general meeting.”
Analysts say huge losses forced the multinational oil company into voluntary delisting on the NGX. The company has been fraught with shareholder disputes, which stalled its annual general meeting (AGM) and affected lots of investors.
The matter was compounded by losses encountered during the 2020 pandemic, and it has been downhill from thereon.
Oando Plc recorded an increase of more than half in turnover for 2021, according to its recently released unaudited earnings report.
The increase helped the oil driller halt a two-year run of losses that began in 2019, the report showed.
A messy shareholder dispute involving an indirect shareholder, Ansbury Investment Inc., had prompted the SEC to bar the firm from holding annual general meetings, making it impossible to release its financials for three years until June 2022.
At the heart of the conflict were loans granted to the shareholder, which forced Oando to make a huge impairment allowance that tipped the company into a loss after tax of N207.1 billion in 2019 and N140.7 billion in 2020.
Revenue for 2021 grew to N722.4 billion from N477.1 billion, while other operating income slowed to N36.7 billion from N43.6 billion as the company recorded a loss on fair value on commodity options in contrast to a gain one year earlier.