Oando to Sell its Downstream Business
Oando Plc (“Oando”) (OANDO:NL), an integrated oil and gas company headquartered in Nigeria, announced that a definitive agreement has been executed with HV Investments II B.V., (“HVI”), a joint venture owned by a fund advised by Helios Investment Partners (“Helios”) and The Vitol Group (“Vitol”), to acquire 49% of the voting rights and 60% of the economic rights in Oando’s downstream businesses (“Oando Downstream”), for circa US$276 million, conditional upon the receipt of regulatory approvals and subject to customary purchase price adjustments, including working capital (the “Acquisition”). 51% of the voting rights will be held by Oando and a Nigerian Helios Affiliate in the ratio of 49%:2%, respectively.
Commenting on the transaction, Wale Tinubu, Group Chief Executive (GCE) of Oando Plc stated, “This transaction is an exciting development in downstream West Africa. By working with Vitol, a global energy and Commodities Company and the largest independent trader of energy products, and Helios, a premier Africa-focused private investment firm, Oando Plc has repositioned Oando Downstream for a new era of investment growth and profitability. Importantly, the divestment enables Oando Plc to focus on its upstream and midstream businesses. Even as proceeds of the sale will be applied almost entirely to reducing Oando’s leverage, we underscore the portfolio rationalization achieved alongside the balance sheet optimization.”
The Oando downstream businesses primarily consist of:
a) Oando Marketing Plc (“OMP”), a petroleum product retailing and distribution company with over 400 retail outlets and strategically located terminals in Nigeria, Ghana and Togo. OMP distributes premium motor spirit, automotive gas oil, dual-purpose kerosene, aviation turbine kerosene, low pour fuel oil, lubricating oils, greases, bitumen and liquefied petroleum gas. Key OMP subsidiaries that are part of the Acquisition include, Oando Ghana Limited, Oando Togo SA, and Clean Cooking Fuel Investments Ltd.
b) Oando Supply & Trading Limited (“OS&T”), a leading indigenous physical trader of petroleum products in the sub-Saharan region, supplying and trading crude oil and refined petroleum products. OS&T trades large volume cargoes to major oil marketers and independent marketers in Nigeria.
c) Oando Trading Limited (Bermuda) (“OTB”), an entity involved in the trading of crude oil and refined petroleum products in international markets.
d) Apapa SPM Limited, the marina jetty and subsea pipeline system capable of berthing large vessels that will increase the delivery capacity and offloading efficiency of petroleum products into major petroleum marketers’ storage facilities at Apapa, Lagos.
e) Ebony Oil & Gas Limited, the Ghanaian supply and trading entity with a provisional bulk distribution company license supplying white products.
Pursuant to the Acquisition, a special purpose vehicle will hold 100% of the economic interests and 49% of the voting rights of Oando Downstream.
The total consideration of US$461.3 million will be funded by a US$276.8 million cash contribution from HVI and US$184.5 million in preference shares issued to Oando Plc, subject to customary purchase price adjustments, including working capital and long-term debt.