Shareholders of Oando have unanimously endorsed the Company's proposed N200 billion (approximately $1.34 billion) additional capital raising. The resolution, passed at the company's annual general meeting (AGM) on July 30, 2009, is the first step in strengthening Oando's capital base to support continued business growth.
The additional funding will be utilized to support the company's expansion plans, especially in the mid and upstream oil & gas sector. This includes oil explorations, the expansion of the rig fleet and extensions to the gas pipeline network, thereby consolidating its leadership position as sub-Saharan Africa's foremost integrated energy solutions provider.
Femi Adeyemo, Executive Director/Chief Financial Officer Oando PLC said, "We expect a positive investor response from local and international stock markets to any capital raising option we choose to adopt, as investors are well aware of Oando's strong fundamentals. We are encouraged by the feedback from our recent local and international roadshows to institutional investors."
Wale Tinubu, Group Chief Executive, commented, "We thank our shareholders for demonstrating overwhelming support and confidence in the Group with this endorsement. We will now proceed to get necessary approvals from relevant regulatory authorities in Nigeria and South Africa with a view to commencing the fund-raising this quarter. In due course we will announce the structure and methodology; but it will include various financing options across multiple markets."
"The strength of our diversified business model, with diverse income streams across the entire energy value chain, will enable us to maintain steady profitability and support healthy returns in the short, medium and long term," Tinubu added.
Diversification into natural gas distribution for local industries, the acquisition of five oil rigs for drilling in the Niger Delta, and the emergence of the company as Nigeria's first indigenous producer with deepwater assets, have positioned Oando for continued growth.
Oando has consistently delivered a 58% year-on-year increase in profitability over the last five years. The additional funds to be raised will reinforce its financial structure, bolstering its sector leadership and strengthen subsidiaries' capital base to take advantage of growth opportunities.
The company recently announced robust 2008 year end results. The group reported a profit after tax in the full year ending December 31, 2008 of $74.58 million. Overall, consolidated turnover increased by 79% from $1.5 billion in December 2007 to $2.7 billion in 2008. The positive growth in turnover coupled with marked improvements in margin efficiency led to an 88% increase in the group’s gross profit from $173.28 million recorded in 2007 to $326.11 million in 2008.
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