Forte Oil considers N20bn capital raise, diversification

• Forte Oil considers N20bn capital raise, diversification

Energy conglomerate, Forte Oil Plc, says it will raise additional N20bn equity capital in a bid to further diversify its business and boost shareholders’ fund.

This move, it explained, was part of the N100bn capital raising approved by its shareholders at its Annual General Meeting.

The Executive Director and Group Chief Financial Officer of the company, Mr. Julius Omodayo-Owotuga, confirmed this in Lagos while addressing newsmen.

He said in terms of revenue contribution to the operations in 2016, the upstream business contributed 1.5 per cent; power, nine per cent, and downstream business, 89.9 per cent to the overall operations.

But in terms of gross profit, power contributed 20 per cent, upstream five per cent, and the downstream contributed 75 per cent, he said, adding that the company was looking at further diversifying its operations for increased returns.

Omodayo-Owotuga stressed, “We have commenced preparation to raise additional capital as we see opportunities, we continue to explore them and raise money in tranches.”

Explaining how the company had fared in recent times, he said, “There are a lot of foreign interests in our company. So when the foreign exchange problem started, it affected us as most of them offloaded our shares and the market price was affected. But since the Nigeria Autonomous Foreign Exchange scheme came on board, there has been rally on our shares gradually.”

He described the company’s last fund raising as very successful, saying, “We raised N9bn by way of corporate bond. This series provided us with the necessary liquidity to actualise our growth strategies and positioned the company for the years ahead.”

“The pricing of the debt instrument demonstrates the markets’ belief in us and the pricing has helped us to reduce our borrowing cost.”

Omodayo-Owotuga said, “We have five pillars strategies going forward. We want to concentrate on high margin products.”