Banks, oil firm seal N94.6b deal
Nigeria’s leading indigenous energy solutions group with a primary and secondary listing on the Nigerian Stock Exchange and the Johannesburg Stock Exchange, Oando Plc, has announced the agreement of a N94.6 billion facility provided by 10 leading financial institutions in Nigeria. The financing, coordinated by the mandated Lead Arranger, Access Bank Plc, is a five-year Medium Term Note (MTN) at Nibor + 200 bps to assist the company meet its financial obligations in the low crude oil price environment.
The company has substantially reduced its debt profile in the last 24 months, and the new loan facility will enable key restructuring of its remaining debt.
Commenting on the transaction, Mr. Wale Tinubu, Group Chief Executive, Oando PLC, said: “In a bid to return to profitability in 2016, I am happy to announce the successful completion of the restructuring of our overall debt profile into a N94.6 Billion Medium Term, five-year consolidated facility, with a three-year moratorium on principal. This is the pivotal leg in our group restructuring plan of growth; via the upstream business, deleverage; via the disposal of $350 million in assets’ value in 2016, and our return to profitability in 2016, driven by our dollar earning oil export & trading activities. The company now stands diversified with higher weighted dollar denominated earnings, an optimised and restructured balance sheet with lower cost of capital and longer tenors. With the upturn in global oil prices to levels above $50 per barrel, we now look forward to the successes of 2016, having ridden out the storm”.
The home-grown financing consortium includes Access Bank, Diamond Bank, Ecobank, FCMB, Fidelity Bank, Stanbic IBTC Bank, UBA Bank, Union Bank and Zenith Bank.
Oando has pledged to continue to exercise strong financial discipline, and the transaction further signifies the steadfast commitment from local banking institutions to support the sustained growth and development of the Nigerian oil and gas sector in spite of the rigid economic climate.