Onasanya, Nwosu, others endorse Oando's rights issue
Category: Capital Market
Shareholders and Institutional investors operating in the Nigerian Capital Market have approved Oando's rights issue of 301.6 million ordinary shares of 50 kobo each at N70.00 per share, describing it as a public offer that would drive investment forecast in the future.
Speaking at the company's investors' forum in Lagos yesterday, they said that the global crunch rocking the financial sector would not have a negative impact on the offer, citing that the public offer being rolled out is coming from a diverse company, which major investments has cut across the nation's oil and gas sector.
They noted that the public offer would survive the storm despite the challenges facing business environment in the country, saying the offer is a long-term investment that would yield high return in the future.
The shareholders however proffered solution that Oando should ensure the continue payment of dividend warrants and bonuses to instill the investing public confidence. The Managing Director of First Bank of Nigeria Plc, Mr Bisi Onasanya, stated that Nigerian financial institutions would come to the aid of the company, noting that bankers are ready to give loan facility to any interested shareholder that is willing to take up its right issue and increase his holdings in the company.
"I appreciate the fact that looking at the Oando's financial statement, it is solid and leveraged. So, on behalf of First Bank, we endorse the offer and challenge others to follow suit because the company has proven itself in all ramifications." He continued, "I know that the bankers are ready to support you on this offer, because we want to increase our portfolio in the Nigerian downstream sector, Onasanya added.
In his own remarks, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Mr Sunny Nwosu said that Oando has demonstrated as a truly indigenous oil company with a first class oil and gas service by taking a business risk with the public offer, even though other quoted companies are afraid to float such offer because of the difficult business terrain.
"We are very happy that you are coming to the capital market at this difficult time when quoted companies on the Stock Exchange are running from the market to raise funds. I believe strongly, we will give you the utmost support and the will to survive the offer.
"From us, we will participate, but remember that you must surpass the forecast and you must not reduce the dividend in other to encourage the investing public to continue to patronize you," Nwosu added. Another shareholder, Mr Elias stated that Oando has moved from a small retail oil company to a world-class oil and gas company.
In his remark, the Group Chief Executive Officer (CEO), Oando Plc, Wale Tinubu said that the public offer is aimed at revamping the huge projects the company is currently investing in, adding that there is plans to further increase it gas production business, petroleum products and rig investment.
He said that the nation's requires about 55 million litres of refined petroleum products to meet local daily consumption, whereas installed capacity of the nation's refineries is merely a fraction of actual volumes required to sustain economic activities.