Oando to raise $193 million to fund ConocoPhillips deal

Oando to raise $193 million to fund ConocoPhillips deal

Nigerian energy firm Oando is offering 30.75 billion naira ($193 mln) in shares to help it buy ConocoPhillips’ assets in Nigeria, bankers close to the deal told Reuters. Oando, which is also listed in Toronto and Johannesburg, agreed to buy the U.S. oil company’s Nigerian business for $1.79 billion a year ago. The deal was delayed by difficulties raising finance. Oando will issue 2.05 billion shares at 15 naira per share to institutional investors in a one-day special placement on Wednesday, two banking sources said. Proceeds from the share sale will help to finance the acquisition. Oando also has commitments for several hundred million dollars in bank loans.

The company hopes the acquisition will help it make the transition from a marketer of refined petroleum products into an upstream business focused on oil and gas exploration and production. Shares in Lagos trading for Oando were flat at 16.10 naira at 1350 GMT. The stock has gained 29.5 percent so far this year.

Oando said earlier this month it would delay the completion of the acquisition deal by two months to January from the scheduled November. It did not give a reason. The company has paid a $450 million deposit for the acquisition. It has a balance of about $1.23 billion to pay after adjustments, the company has said.

Conoco’s fields produced about 43,000 barrels of oil a day last year and have proven reserves of 213 million barrels of oil equivalent. Oando chief executive Wale Tinubu has said the upstream business will account for about three quarters of Oando’s assets after the acquisition, against 40 percent now.