Oando prepares to raise funds for ConocoPhillips acquisition

Oando  World Economic ForumOando CEO Wale Tinubu. (Image source: World Economic Forum)

Nigerian energy firm Oando has offered its third rights issue in an attempt to raise capital to fund its US$1.79bn acquisition of ConocoPhillips' Nigerian operations

Oando has revealed plans to raise US$340mn through the exercise, which would see a steep increase in its issued shares.

The company CEO Wale Tinubu said in a statement, “We count on the consistent support of our shareholders to seize the opportunity to take up their rights and benefit from the higher-margin value creation the acquisition offers.”

Since the company's share value reached a high of US$1.5 per share in 2008, Oando has seen its share price plummet. Currently, Oando shares trades for about seven cent per share on the floor of the Nigerian Stock Exchange (NSE).

Oando has urged its shareholders to subscribe to more shares to help boost the fundraising.

According to Nigerian newspaper Financial Mail, no financial institution has stepped up to underwrite the issue. Many large emerging market fund managers, including those of Mark Mobius’s Templeton Emerging Markets Group and HSBC, have let go of most of their Oando stock in recent weeks.

In December, Oando PLC, had announced its affiliate Oando Energy Resources, has entered into agreements with ConocoPhillips to acquire its entire business interests in Nigeria for an estimated cash of US$1.79bn, including customary adjustments.


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