Oando Tumbles as Contractors Kick Against Acquisition
Amidst disagreement over its Nigerian Agip Oil Company acquisition, the share price of Oando Plc reversed from climbing further after a consecutive price uptick that followed its earnings announcement. However, the party was over as the company’s valuation tumbled strongly last week.
Leading poor performers in the local bourse, data from the Nigerian Exchange (NGX) showed that the oil company’s share price went down by 24% in a week due to profit-taking activities after solid gains that were recorded.
There was initial share buying by Alpha seekers taking positioning on the company stocks after it returned to profitability. The company share fell to N9 on Friday, from N11.50 due to weak sentiment on Nigerian stocks.
With its 12.431 billion shares outstanding trading at N9, the company was valued at N112 billion on Friday, according to data from the Nigerian Exchange screened by MarketForces Africa.
In 2021, Nigeria’s Indigenous Energy Company returned to profitability after loss-making streaks. However, buying sentiment plunged last week, spurred by disagreement over the asset acquisition of Agip oil assets which some stakeholders kicked against.
The Indigenous contractors of the Nigerian Agip Oil Company (NAOC) kicked against the ongoing acquisition of the company by Oando Plc. The energy company has come to fore forefront in acquiring valuable oil assets to boost capacity. However, the coalition of Indigenous Contractors of Agip is threatening to occupy all facilities belonging to Agip in the Niger Delta over arrears of unpaid contract debts.
In a statement signed by its Chairman, Ifeanyichuku Olisa and Secretary, Chief Felix Alumona, alleged that Agip owed contractors a huge amount of money for jobs they did for the company.
“We recently heard that NAOC has been acquired by Oando and the acquisition process is ongoing. Whilst we hold no objection to the purported acquisition, we are concerned about what happens to the monies NAOC owes all its contractors”, the association said in a statement.
The contractors said some of the debts had been owed since 2020 adding that loans were obtained from the banks by contractors to execute the jobs. Oando Plc, returned to profitability in the financial year 2021 after it reported about N141 billion loss after tax in 2020, according to its delayed audited financial statement for 2021 submitted to the regulator.
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