Shareholders of Oando Nigeria Plc on Monday endorsed the company’s plan to raise N80 billion through rights issue.
The shareholders gave the approval at the company’s 38th Annual General Meeting held in Lagos.
They also approved the company’s plan to divest all shareholding and investment in the downstream business by way of sale, transfer or any other form of disposition to enhance growth.
They also authorised the company’s directors to appoint professional advisers and other parties to the transactions.
Speaking at the meeting, Sunny Nwosu, the National Coordinator of the Independent Shareholders Association of Nigeria, urged the company to do everything within its powers to “clean up” the balance sheet.
Nwosu advised the company’s management to work hard to do that and return the company to profitability in the nearest future.
Boniface Okezie, the President of theProgressive Shareholders Association of Nigeria, urged the company to divest some of its assets and subsidiaries and concentrate on the few that would add value to its business.
Okezie said the divestment would enable it to reduce indebtedness to banks and boost the working capital, adding the divestment should be done in a transparent manner to avoid insider abuse.
He said: “There is no need having 100 subsidiaries that are not adding value to the bottom-line.”
He also urged the company to ensure appropriate timing of the rights issue to avoid under subscription.
Wale Tinubu, the company’s Managing Director, said divestment of the downstream business would be concluded in the next two years.
Tinubu said the company would also inaugurate the Apapa Jetty, which would emerge Africa’s first midstream jetty in the next couple of weeks.
He said the project would contribute significantly to the company’s overall net profit through tolling fees as well as reposition it for enhanced profitability.
Tinubu said the company was committed to shareholders value, adding that it would begin dividend payment in the nearest future.
“The divestment will reposition the company for a new era of investment growth and profitability, whilst enabling the Oando Group to focus on its midstream and upstream ambitions,” he said.
He said the proceeds of the divestment would be utilised for debt reduction to shore up the company’s balance sheet in “these challenging times.
“Our strategic focus is to increase our operational efficacy across our subsidiaries, deleverage our balance sheet and return the company to profitability.”
The News Agency of Nigeria recalls that the company posted a loss after tax of N179 billion for the financial year ended December 31, 2014.
This was against a profit after tax of N4.68 billion posted in 2013.
The company recorded a turnover of N424.68 billion compared with N449.87 billion recorded in the corresponding period of 2013.
Similarly, the company for the six months ended June 30, 2015 declared revenue of N60.32 billion against N55.67 billion posted in 2014.
Its loss after tax stood at N34.68 billion in contrast with profit after tax of N5.74 billion achieved in 2014.
Tinubu said the company’s profit after tax numbers were impacted by impairments of N76.9 billion in exploration and production, N16.9 billion in under lift and N7.3 billion foreign exchange losses, among others.
NAN.