Oando Soars by 34% after Funding Acquisition of NAOC
Oando Plc is on the way to reclaim losses following profit taking activities that happened when the oil stock reached a 52 week high in the local bourse. Data from the Nigerian Exchange showed that the indigenous energy company gained 33.5% in the equities market last week, rising from N35.85 per share to N47.85 due to a fresh rally.
MarketForces Africa reported that after the oil stock peaked at N49.1, sell side stock traders started to book profit and investment banking firms announced decision to go underweight after significant loss in value.
However, the stock began to grow in popularity across the Broadstreet on the back of the completion of the acquisition of Nigerian Agip Oil Company and the OVH deal with NNPCL.
At the current price, Oando Plc is trading at less than 3% below its 52 week high price of N49.10 in the equity market, according to its historical trading data on the Nigerian Exchange.
In a regulatory filing, Oando Plc announced that the company has finalized the acquisition of NAOC for $783 million from Eni, an Italian oil company that recently exited Nigeria.
African Export-Import Bank (Afreximbank) arranged a senior US$500-million and a junior US$150-million reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited.
Analysts said the acquisition has raised Oando Plc’s business fundamentals as well as its leverage position, noting that Afreximbank provided the funds to achieve the feat. It is a win for Oando, and every indigenous energy player, as we take our destiny in our hands, and play a pivotal role in this next phase of the nation’s upstream evolution.
“With our assumption of the role of operator, our immediate focus is on optimizing the assets’ immense potential, advancing production and contributing to our strategic objectives”, its chief executive office wale Tinubu said.
“This we will do while prioritizing responsible practices and sustainable development in ensuring a balanced approach to our host communities, and environmental stewardship as we complement the nation’s plan to boost production output.
“We thank Afreximbank for its unwavering leadership in bridging the trade finance gap in Africa and ensuring that Oando can consolidate its stake in the Joint Venture via the acquisition of NAOC 20% stake.” NAOC is a subsidiary of Italian multinational ENI S.P.A.
Afreximbank, retained as mandated lead arranger for the transaction, also served as book runner, coordinator, underwriter, escrow agent, facility agent and security trustee, and also participated and underwrote US$350 million of the facility.
Also participating in the transaction were Indorama Eleme Petrochemicals Limited, with US$150 million, and Mercuria Energy Group, with US$150 million. #Oando Soars by 34% after Funding Acquisition of NAOC CBN Defends Naira with $39m in Forex Market
