Oando to Raise $500m From Johannesburg Stock Exchange

By Eddyson Lugangwa Posted 19 June 2006 @ 07:33 pm EET     Print     Reprint     E-Mail     Comments

Johannesburg (IBTimes.com) - TO enhance its operational capacity, the board and management of Oando Plc, a company quoted on both the Nigerian Stock Exchange and Johannesburg Stock Exchange (JSE) has concluded plans to raise $500 million from the South African capital market.

The fresh fund, according to the company's Managing Director, Mr. Wale Tinubu, would be raised through debt and equity, either in the last quarter of this year or the first quarter of next year.

Tinubu, who addressed capital market correspondents at the weekend on the company's plans in the next few years, noted that the fund would be invested in procuring energy services.

He disclosed that investment in energy services brings more returns and profitability for the company and dividends for shareholders at the end of the day when compared with expending the retail services and marketing of the company, which yields high turnover and less profitability.

Tinubu said: "We will be raising $500 million in form of debt and equity. This company has the capacity, strong balance sheet and other positive factors to sustain it.

We have been able to service our debts, so there is no problem in that area." On whether the fund would be raised from both the Nigerian and foreign investors, Tinubu explained that investors both from within and outside the country are free to subscribe when the offer opens.

His words: "The paper would be filed here, but it would be a world-wide offer. Nigerians can subscribe. "Debt would be funded by banks in Nigeria and foreign banks, and the proceeds would be used to provide energy services which is more profitable."

He disclosed that the company would commence drilling of oil in the fourth quarter of this year at Onne, which will enhance profitability and returns to shareholders.

Besides, he said Oando is already expending supply and trading to Benin Republic, Ghana and Liberia and other countries and is aggressively scouting for additional blocks and will be participating in the next bidding round.