Shareholders urge investors to leverage Oando’s new deal for enhanced returns
Shareholders , under the aegis of Constance Shareholders Association of Nigeria, have urged investors to leverage the ongoing investment expansion strategy embarked by Oando Plc and increase their portfolio for long-term capital appreciation.
The National President of the Association, Shehu Mallam Mikail, who pointed out that the deal would boost the company’s stock in the market, added that the investment shows that there are still opportunities in the nation’s stock market.
“Oando management knows when to strike a deal for the best interest of all stakeholders and shareholders and I did say that having a stake in the company is going to be a plus for a long term investors. I believe that some interested investors would like to take advantage now.
“This will help in the share prices to go up as many would like to achieve good returns with this investment. This would pave way for any interested investor to come in. With this, investors would believe that there are still chances and opportunities in our market.”
Oando, at the weekend, announced the execution of a definitive agreement with a vehicle owned by funds advised by Helios Investment Partners LLP (Helios), a premier Africa-focused private investment firm, to acquire 49 per cent of the voting rights in Oando’s midstream business subsidiary, Oando Gas and Power Limited (OGP).
The agreed transaction consideration of US$ 115.8 million is conditional upon the receipt of regulatory approvals and subject to customary purchase price adjustments. Upon completion, Oando will retain 49 per cent of the voting rights in OGP.
The residual two per cent will be held by a local entity. OGP is the pioneer developer of Nigeria’s foremost natural gas distribution network and has subsequently grown to become the largest private sector gas distributor in Nigeria, delivering at peak, 70 million standard cubic feet per day (mmscf/d) to over 175 industrial and commercial customers via its vast gas infrastructure network.
With over 260 kilometer in pipeline infrastructure built, OGP provides unique energy solutions primarily through its subsidiaries: Gaslink Nigeria Limited (Gaslink), Gas Network Services Limited (GNSL), and Central Horizon Gas Company (CHGC).
Speaking on the agreement, the Chief Executive of the company, Adewale Tinubu explained that the synergy would help the firm to revolutionise the sector and position gas as a key driver for the nation’s economic empowerment.
“This strategic alliance will firmly leverage our local knowledge and expertise alongside Helios’ strong financial capabilities. Through the optimisation of our existing business operations and the expansion of our footprint, we will revolutionise the sector and position gas as a key driver for Nigeria’s economic empowerment.
“We look forward to completing the transaction, which will create a formidable leader of gas and power solutions in sub-Saharan Africa.” The Co-founder and Managing Partner of Helios Investment Partners, Tope Lawani, said the transaction was in line with Helios strategy of investing in businesses that provide cost-effective and reliable energy access solutions.
“We look forward to supporting OGP’s continued growth and working with all stakeholders to improve the reliability of gas supply to the company’s numerous industrial customers, who all play a critical role in the growth of the economy.’’