Oando’s rights issue, which opened on January 25, 2010, is closing today after a four week run, while expectations are high on its success, given interest shown by the company's shareholders.
Also, the rights issue may have renewed investors' interest in the capital market, which has been at a very low ebb owing to the stock market crash that saw investors losing trillions of Naira. The rights issue, which was put at N70, offered investors over N23, before it was put on technical suspension at the commencement of the offer.
According to an official of the company who pleaded anonymity, "we are waiting to see how investors will react to the rights issue. But so far, the feelers we are getting is very positive and we are waiting for its conclusion before deciding to approach the market to access the funds.
The rights issue also attracted investors' interest in the Johannesburg Stock Exchange. "If a company is selling rights issue at a discount and investors are still buying the shares in the secondary market at a higher price, it means that the company has a very promising future. Investors are buying into it with the expectation of reaping higher dividend," a broker noted in regard to Oando's offer.
Meanwhile, the company's share is still on technical suspension until the offer ends. Investigation has revealed that most of the shareholders are not willing to sell their shares, even at N93.99 before the technical suspension, believing that the price is undervalued given the rapid growth in virtually all the performance indicators of the company in recent times.
Stockbrokers also noted that shareholders are "confident with the management of the company as gains from its massive investments begin to manifest."
The company paid a total dividend of N6.00 per share to its shareholders in the last yearly general meeting, having earlier received N3.00 per share as interim dividend, hoping that the company will surpass the current dividend next year