Oando Renews Moves to List Subsidiary on Nigerian Bourse

Oando Plc is renewing moves to list its downstream subsidiary, Oando Marketing Limited (OML), as a separate entity on the Nigerian Stock Exchange (NSE). This follows the approval given by the shareholders of the company at the annual general meeting held in Lagos last Monday.

Oando had in 2011 received the approval of the Nigerian Stock Exchange (NSE) to list OML in the fourth quarter of that same year. However, the plan was shelved due to the inauspicious prevailing environment at that time.

However, the leading energy firm, is making fresh moves to realise the objective of listing OML which will give shareholders the opportunity to compare the company with others in the petroleum marketing sector of the NSE.

The shareholders, who had earlier in the 2009 given their approval for the listing, on Monday, renewed that approval by authorising the directors to “reorganise and/or divest any and/or all of the company’s shareholding and investments in the downstream business by way of sale, transfer and/or any other form of disposition which the directors resolve to be in the best interest of the company subject to the approvals of relevant regulatory authorities.”

Speaking on the listing strategy, Group Chief Executive Officer of Oando Plc, Mr. Wale Tinubu said to list its downstream business so that they will become a separate entity.

“Oando downstream operations will be listed on the NSE, in which Oando Plc will still remain a shareholder of the company and will control the operations but will invite other shareholders who are seeking exposure to the downstream. This will allow us to take some of the cash in the downstream to invest in the midstream and upstream where returns are better,” he said.

According to him, the company is making these decisions by looking at the portfolio, at the returns and cost of capital and which business represent their future and which business represent their past.

He explained that the downstream business is a lot of volume, is lot of cash but the return on investment is so low while the company continues to worl for the banks.

He said every naira the company made as a profit in that business, the banks are paid N5 as interest, adding that while the downstream business gives a return of 2.5 per cent return based on turnover, to upstream gives over 20 per cent return.

Tinubu disclosed that the first step in the divestment is to seek potential buyer for up to 49 per cent of the company, while the remaining 61 per cent would be held by Oando Plc.


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