Wale Tinubu, group chief executive of Nigeria’s Oando Plc, on Wednesday reportedly said the company is done yet with raising fresh capital, despite a huge cut in its share price from the 2014 peak price of N33.47 each.
The capital raise, he assured would help complete payment for the $1.5bn Nigeria assets of Conoco Phillips it bought in 2013, which is 77% down over the next two years, he told Reuters.
Oando says it has remained victim of a combination of high financing costs and lower oil prices at the international market which hit its profit, making it unable to repay the debt.
Tinubu said Oando plans to pay-off the rest in 12 months, which would allow it to resume dividend payments, adding that Oando would be left with total debt of $300m.
But the group, he said, is undeterred by draw back and plans to continue pursuing acquisitions as multinational oil companies sell assets.
Oando, Tinubu said, would take on new deals after paying down its current debt.
Exxon Mobil is weighing the sale of its Nigerian oil and gas fields for up to $3bn to focus on new developments in U.S. shale and Guyana, industry and banking sources told Reuters.
“Our expectation is that over a four-year horizon we will no longer have long term debt,” Tinubu told Reuters by email.
In 2016, the Central Bank of Nigeria (CBN) gave lenders a deadline to reach a deal to resolve Oando’s debt issue, leading to a 94.6 billion naira loan restructuring including asset sales.
Oando, last week published its 2018 audited financials, with its loss dropping to N18.3bn, while its auditor Ernst & Young questioned its “going concern” status, saying that its current liabilities were in excess of its current assets (READ MORE).
As a remedy, Oando plans to reclassify some current liabilities as long-term liabilities to remedy its working capital by June and swap N27.5bn of debt into equity, it said in a note to its 2018 accounts.
It also plans to sell up to $200m via a rights issue by October and cut its stake in its upstream unit to raise $275m in 2020, Oando said in its accounts.