By Kelechi Mgboji
Assistant Business Editor
A month after Oando announced a N94.6 billion credit facility from a consortium of 10 financial institutions, the oil firm has again announced a $210 million recapitalisation of its downstream operations.
The $210 million investment by HV Investments II B.V. (HVI) will see a new company emerge to hold interests in Oando Marketing Limited, Oando Supply & Trading Limited, Apapa SPM Limited, and Oando Trippmart Limited.
However, Oando Plc will retain 49 per cent shareholding in the newly formed corporate vehicle, with the Consortium owning 49 percent, while the residual two percent will be owned by a local entity.
A statement by the oil marketing firm described HVI is a joint venture owned by Helios Investment Partners (Helios), a premier Africa-focused private investment firm, and the Vitol Group (Vitol), the world’s largest independent trader of energy commodities.
There have been growing concerns over the health of the Nigerian Stock Exchange (NSE) quoted company as a going concern, with huge debts threatening the company’s fortunes and future.
The indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchanges, had reported a loss of N49.7 billion for the 12-month period ended December 31, 2015, after a loss of N145.7 billion in the prior financial results.
The company also reported a loss before tax of N51 billion in 2015 compared with N138 billion in 2014.
Further financial highlights indicated that revenue decreased by 10 per cent to N381.7 billion compared to N425.7 billion recorded in 2014 while gross Profit increased by seven per cent to N77.7 billion compared to N72.3 billion in 2014.
It had paid N6.2 million fines to the NSE for late submission of its 2014 financial statements, first and second quarter of 2015 financial statements.
But there seems to be no end in the borrowing spree as the company keeps accumulating more loans after paying little of outstanding debts.
Access Bank, Diamond Bank, Ecobank, First City Monument, Fidelity Bank, Keystone Bank, Stanbic IBTC, United Bank for Africa , Union Bank of Nigeria, and Zenith Bank had pooled the N94.6 billion five-year Medium Term Note (MTN) loan.
Oando Group Chief Executive Officer, Wale Tinubu, hailed it as a “successful completion of restructuring our overall debt profile” and the pivotal leg in restructuring growth plan.
He explained that the new company will be renamed OVH Energy (OVH) to reflect its ownership structure and the commitment of its new shareholders, adding that the firm will be led by a local management team, tasked with building the business, safely and efficiently.
In the new business structure, the initial board will comprise Tinubu, Group CEO as chairman; Christian Chammas, CEO of Vivo Energy which operates 1,600 service stations in 16 African countries; and other Vitol and Helios representatives.
The current CEO, Yomi Awobokun, will continue in his role. The service stations will retain the Oando brand.
OVH’s assets will comprise over 350 service stations in Nigeria with supporting infrastructure, including 84,000 tonnes of storage and a newly built inbound logistics jetty; as well as complementary businesses, chiefly LPG filling and distribution, lubricants and an interest in a supply and bulk distribution company in Ghana.
The new business will be the second largest downstream fuels company in Nigeria, with a market share of 12 per cent.
Co-founder and Managing Partner of Helios Investment, Tope Lawani, said: “We look forward to leveraging Helios’ expertise in support of OVH’s management team, and to building another partnership with Vitol, with whom we created Vivo Energy, a leading pan-African downstream business.”