Proshare Logo
   Market Date: 30-09-2014   
Agriculture All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Personal Finance Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs Stock PICKS Taxation Telcos Travel & Tours Unlisted OTC MARKET World of Business

Oando Group to offer investors 49% of marketing arm in strategy shift

Category: Capital Market


  Read (4474)
Oando Group to offer investors 49% of marketing arm in strategy shift

MONDAY, 23 AUGUST 2010 01:17 PHILLIP ISAKPA  


A major shift in strategy is on the cards at Oando Group with a plan by the indigenous oil company to hive off 49 percent stakes in its marketing arm, Oando Marketing, to investors, BusinessDay learnt from capital market sources close to this arrangement at the weekend. In the 2009 financial result, Oando Marketing recorded sales in excess of N163 billion and posted profit of N5.8 billion.


According to the plan, in order to consolidate its leadership in all sectors of the oil and gas industry, Oando plc will restructure its business strategy with the divestment of about 49% of its stake in Oando Marketing.


Oando spokesperson last night declined comments advising “until all relevant approvals are in place.”This strategy was designed to “create investment opportunity for shareholders in the upstream and downstream [sectors of the business],” said one fund manager. The move will provide investment options to shareholders interested in guaranteed short to medium term returns in the marketing company. The strategy will also offer long term investment option through the company’s upstream business, Oando Plc, affording investors the opportunity to maximize risks through diversification. Indeed, a document seen by BusinessDay suggests a company upbeat about the value the new strategy will bring to investors.


“A new window of opportunity is available to shareholders by the alternative investment options, all from a Group with proven track record of impressive results in spite of challenging economic environment,” internal documents shows.


The eventual listing of Oando Marketing on the stock exchange will significantly alter the current classification of companies as the NSE will have to create a different category for Oando plc, the oil exploration and production business. That category could be called Energy, as the case on the Johannesbourg Stock Exchange, while Oando Marketing will remain under the petroleum marketing sector. Oando Group currently owns 100 percent of the marketing business, but BusinessDay learnt that the company will release as much as 49 percent to the investing public in Nigeria, a move that will eventually lead to the listing of Oando Marketing on the Nigerian Stock Exchange.


The move is likely to be interpreted by the market as a clear effort by the company to create an understandable distinction between its upstream and downstream businesses, as it continues to grow its oil exploration portfolio and with a marketing operation that has been on for 54 years.“What this means is that the creation of Oando Marketing plc from the group will favour shareholders who seek yearly dividends from a company that on its own will no longer be tied to the very long term nature of oil exploration and production business where investors often have to wait for that big pay day even while enjoying capital appreciation in the value of their shares,” said a fund manager at a leading investment firm.


Oando began its early life as Unipetrol Nigeria plc, an oil marketing company that was bought by Ocean and Oil Holdings led by Wale Tinubu, current group chief executive officer of the company, in 2000. In 2002, Unipetrol merged with Agip Nigeria plc after the former bought into Agip and the name was changed the following year to Oando.


Investors are likely to see a lot of value in the new strategy when the planned sale goes ahead. BusinessDay has learnt that the marketing business generates a cash flow of N500 million daily in sales and has been delivering profit yearly to the group under the leadership of Omamofe Boyo. But sources familiar with the kind of plan that Oando is trying to pull off say there are much wider reasons why this is the way to go for the company. Specifically, they say it offers some significant benefits to both the group and the marketing plc that will emerge.


“For the marketing business, the divestment strategy will provide a credible investment option for shareholders


http://www.proshareng.com/investors/company.php?ref=OANDO


Source:BusinessDay



Tags: , 



Comment With Your Facebook or Yahoo! ID


Latest news


News on Capital Market

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Newsletter
Contact Us
Message from CEO
Resources

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
WebTV
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

#1minNews
News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Newsletters
Discussion Forum
Policy

Subscriber Agreement
Privacy Policy
Data Policy
Disclaimer
Copyright Policy
Trademarks
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Training
Legal Support Services
Web/Technology Services
File a Complaint