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Oando Sells 49% Stake in Midstream Unit for N35bn

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  • Oando Sells 49% Stake in Midstream Unit for N35bn

Oando Plc, an indigenous energy group, has announced the completion of a $115.8m (N35.3bn) partial divestment of its midstream subsidiary, Oando Gas and Power Limited, to Glover Gas & Power B.V., a special purpose vehicle owned by Helios Investment Partners LLP, an Africa-focused private investment firm.

The deal, according to a statement on Tuesday, will see Helios acquire 49 per cent in voting rights, while injecting cash into OGP and the larger Oando Group.

The Group Chief Executive Officer, Oando, Adewale Tinubu, was quoted as saying, “The commencement of this strategic partnership underlines Oando’s status as the indigenous partner of choice for international firms in our industry, while also acknowledging the group’s unwavering commitment to improving access to gas and power solutions for industries, consumers and commercial counterparties in the sub-region.

“This partnership will firmly leverage OGP’s local knowledge and expertise, alongside Helios’s global network and financial capabilities, to optimise our existing operations and expand our footprint.”

The Co-founder and Managing Partner, Helios Investment Partners, Tope Lawani, said, “The completion of the transaction underscored Helios’ commitment to investing in businesses that deliver energy access solutions to industries and consumers across the continent.

“We look forward to working closely with the OGP management team and other industry stakeholders to consolidate the company’s position as a premier provider of cost-effective and reliable gas and power infrastructure.”

According to the statement, the new partnership with Helios is also testament to Oando’s legacy of continuous growth through audacious acquisitions and successful partnerships, most notably its landmark $1.5bn acquisition of ConocoPhillips Nigeria in 2014.

The statement described the OGP as the pioneer developer of Nigeria’s foremost natural gas distribution network and had subsequently grown to become the largest private sector gas distributor in the country, delivering at peak 70 million standard cubic feet per day to over 175 industrial and commercial customers via a vast network of gas infrastructure.

According to it, with over 260km in pipeline infrastructure built, OGP provides energy solutions in the South-East and South-West primarily through its subsidiaries, Gaslink Nigeria Limited, Gas Network Services Limited and Central Horizon Gas Company.

“Amid a global downturn and pressured crude oil prices, the deal is another defining moment in Oando’s optimisation of its balance sheet and asset portfolio. By proactively implementing a strategic direction centred on self-sustaining entities, the company is addressing its immediate objective of aggressive debt reduction, while remaining a viable player in the sector,” it added.

According to the statement, since 2011, Helios has made investments in the African oil and gas sector, and partnered Vitol to purchase an estimated $1bn 40 per cent stake in the African downstream fuels business of Royal Dutch Shell.

Oando also completed a $210m recapitalisation of its downstream business with the consortium earlier in the year.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

CBN Leaves Interest Rate Unchanged at 11.5 Percent

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Godwin Emefile

CBN Leaves Interest Rate Unchanged at 11.5 Percent

The Central Bank of Nigeria led Monetary Policy Committee (MPC) left the interest rate unchanged at 11.5 percent to aid economic recovery from recession.

The MPC lowered the interest rate by 100 basis points to 11.5 percent in the third quarter to boost capital inflow to the real sector of the economy and halt the continued plunge in economic productivity.

The members voted unanimously to leave the rate unchanged because of the poor macroeconomic factors caused by the COVID-19 pandemic, rising inflation and lockdown.

Asymmetric Corridor was also retained at +100/-700 basis points while Cash Reserve Ration (CRR) stood at 27.5 percent. The liquidity Ratio was left at 30 percent, according to the CBN Governor, Godwin Emefiele.

Emefiele disclosed this on Tuesday after two days of meeting. He added that the global economic outlook has started showing improvements.

The retention comes as no surprise to experts given the escalating inflation rate, weak economic productivity and the present economic recession.

Obadiah Mailafia, a former deputy governor, CBN said “I do not see them shifting ground on those key areas. It would be counter-intuitive to reduce the MPR in a time of rising inflation.

The government is facing what is increasingly looking like a fiscal crisis, as government revenues continue to fall while a sizeable portion of government funds are going into debt-servicing,” Mailafia stated, noting that “More than 400 federal agencies have been unable to pay salaries to public sector workers for several months a in a row. Nigeria’s economic challenges are compounded by the geopolitical challenges of banditry, violence and terrorism.”

“As expected, I did not see them shifting ground on those key areas. It would be counter-intuitive to reduce the MPR in a time of rising inflation.

“I, therefore, suspected they would want to leave things as they are in order to weather the current storm, in the hope that things will begin to improve by Q2.

“A stable and consistent monetary policy stance can help stabilize the economic outlook while helping actors to anchor long-term rational expectations,” the former CBN stressed.

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Banking Sector

Deposit Money Banks Pay N2.7 Billion as Customers Complaints Rise by 34%

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Deposit Money Banks Pay N2.7 Billion as Customers Complaints Rise by 34%

Nigeria’s Deposit Money Banks (DMBs) refunded banks’ customers N2.67 billion in the first half of 2020, according to the latest findings.

This represents a 63 percent decline when compared to the N7.2 billion refunded in the same period of 2019.

A breakdown shows “Bank received 2,051 complaints from consumers of financial services providers in the first half of 2020, compared with 1,528 complaints in the corresponding period of 2019. Of the total 1,167 or 56.9 percent were complaints on electronic/card, while 125 or 6.1 percent were on excess charges. Other complaints were, mainly, on frauds, dishonoured guarantees and unauthorised deductions/transfers, among others.

“A total of 1,519 complaints, including those outstanding from 2019, were resolved in the review period, compared with 1,548 in the corresponding period of 2019. Total claims in the review period in local currency and foreign currencies amounted to N4.58 billion and $151,647.82, compared with N8.70 billion and $315,475.54, respectively, in the corresponding period of 2019.

“Relief was brought to many of the affected customers as the sums of N2.67 billion and $144,176.68 were refunded in the first half of 2020, compared with the N7.20 billion and $315,229.02, refunded in the corresponding period of 2019.”

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Banking Sector

Ecobank Nigeria Received N50 billion 10-Year Bilateral Subordinated Loan

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Ecobank Nigeria Received N50 billion 10-Year Bilateral Subordinated Loan

Ecobank Nigeria announced it has received N50 billion 10-year subordinated Loan.

Adenike Laoye, Group Head, Corporate Communications, Ecobank Nigeria, disclosed this in a statement released through the Nigerian Stock Exchange.

The statement read in part, “The bilateral funding provides stable medium-term liquidity to the balance sheet of Ecobank Nigeria and positively improved its balance sheet ratios, especially the capital adequacy ratio by circa 300 basis points.

The transaction proceeds would be deployed to support Micro, Small and Medium Scale Enterprises (“MSMEs”) and Small Corporates.

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