Besides, the company also received shareholders’ nod to raise N80 billion by way of rights issue to existing shareholders.
The shareholders, who spoke at the 38th yearly general meeting of the company held in Lagos yesterday, also authorised the company’s directors to appoint professional advisers and other parties for the transactions.
Specifically, the president of Independent shareholders Association of Nigeria, Sunny Nwosu urged the company to do everything within its powers to ‘clean up’ the balance sheet and restore the company to profitability.
Similarly, the President, Progressive Shareholders Association of Nigeria, Boniface Okezie urged the company to divest some of its assets and subsidiaries and concentrate on few that add value to the business.
He added that it would help reduce the indebtedness to banks and boost the working capital.
“Identify the buyers that would do the business in a transparent and accountable manner. There is no need having 100 subsidiaries that are not adding value to the bottomline.”
The Managing Director of the company, Wale Tinubu explained that the company would conclude the divestment of downstream business within the next two years.
He pointed out that the company has continued to execute its strategic plan as outlined in previous years, successfully completing the first segment of the 10 km Greater Lagos Pipeline Ijora – Marina extension, and signed an agreement with an indigenous contractor for the 9km extension of the CHGC pipeline in Port Harcourt.
The company, according to him, has also signed agreements with General Electric, Nigeria to engage in various initiatives to develop power generation projects, compressed natural gas facilities and mini Liquefied Natural Gas (LNG) projects, aimed at aggressively expanding its gas footprint in Nigeria whilst remaining the gas provider of choice to consumers.
“Oando steadily navigated the ups and downs of the cyclical oil & gas market by adapting quickly, recording key operational milestones and being fiscally innovative to enable its business operations run efficiently. This led to an 82% increase in 2P reserves from 230.6 MMboe to 420.3 MMboe and an 11 fold increase in production from 4,531 boe/day in H1 2014 to 55,399 boe/day in H1 2015.”
Tinubu also explained that the company also reset its crude oil hedge floor price from an average of $95.35 per barrel to $65 per barrel.
This measure, according to him, saved the company $65 million in interest payments over the remaining term of the loan facilities used in its landmark acquisition of ConocoPhillips Nigeria.
He told shareholders that the company also upsized $91 million of its senior secured facility from $215 Million to $306 Million, and repaid its $100 Million African Export-Import Bank subordinated loan facility, thus reducing its debt position from $900million as of July 2014 to $500million as of October 2015.
He added that the company also completed the construction of the Island Jetty in Apapa, Lagos which will provide a more efficient platform for product receipt to all marketers and lead to higher margin volumes with an estimated $36 million expected annually in revenue and $120 million demurrage cost-savings for the sector per annum.
“Looking to the future, Oando’s E&P subsidiary is expected to contribute $150 million on an annual basis translating to expected dividends for shareholders once its debt portfolio is cleared. It is incumbent for us to change because the whole world is changing. We cannot continue to grow without reviewing our balance sheet and selling what we fell is unprofitable for the company.”
The company recorded a turnover of N424.68 billion compared to N449.87 billion achieved in the corresponding period of 2013 while loss after tax stood at N179 billion compared to profit after tax of N4.68 billion posted in 2013.
Similarly, the company for the six months ended June 30, 2015 declared a revenue of N60.32 billion against N55.67 billion posted in the comparative period of 2014.
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