Oando Plc,
Nigeria’s leading indigenous energy group and the leading integrated energy
solutions group in sub-Saharan Africa, has completed a $115.8 million partial
divestment of its midstream subsidiary, Oando
Gas and Power Limited (“OGP”), to Glover
Gas & Power B.V., a special
purpose vehicle owned by Helios
Investment Partners LLP, a premier Africa-focused private investment firm.
Commenting
on the completion of the transaction, Oando Plc’s Group Chief Executive, Jubril Adewale Tinubu, said: “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 deal which
was initially announced on September 19, 2016, will see Helios acquire 49
percent in voting rights, while injecting cash into OGP and the larger Oando Group.
Co-founder and Managing Partner of Helios Investment Partners, Tope Lawani, added: “The completion of this transaction underscores 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.”
OGP is the
pioneer developer of Nigeria’s foremost natural gas distribution network and
has subsequently grown to become the largest private sector gas distributor in
Nigeria, delivering at peak, 70 million standard cubic feet per day (“mmscf/d”)
to over 175 industrial and commercial customers via a vast network of gas
infrastructure. With over 260km in pipeline infrastructure built, OGP provides
unique energy solutions in South-East and South West Nigeria primarily through its
subsidiaries: Gaslink Nigeria Limited
(“Gaslink”), Gas Network Services
Limited (“GNSL”), and Central
Horizon Gas Company (“CHGC”).
In May, OGP
announced the development of a revolutionary mini Liquefied Natural Gas (LNG)
facility via its newly-created Transit
Gas Nigeria Limited (“TGNL”) subsidiary in Ajaokuta, Kogi State. This was a
welcome development for the oil and gas sector, as it sees the industry improve
its supply across the country, utilising cutting edge technology of mini LNG to
reach areas with limited physical infrastructure. The pioneering 20 mmscf/day
liquefaction plant will aim to fulfill the gas supply requirements for captive
power plants, embedded generation, and industrial clusters in the Northern
region, as well as stranded customers in Southern parts of the country.
The
midstream subsidiary is also completing extension works to its Greater Lagos
gas infrastructure along the Ijora-Marina axis to provide power solutions for
industrial and commercial businesses with the area. Extensive additions are
also being made to CHGC’s gas network in the Trans-Amadi locale of Port
Harcourt.
Amid a
global downturn and pressured crude oil prices, the deal is another defining
moment in Oando’s optimization of its balance sheet and asset portfolio. By
proactively implementing a strategic direction centered on self-sustaining
entities, the company is addressing its immediate objective of aggressive debt
reduction while remaining a viable player in the sector.
The company
recently restructured a N94 billion Medium Term Loan (MTL) facility for an
additional five years while reducing its interest rate burden. Other strategic
deleveraging initiatives undertaken by the company to enhance its operational
and financial positioning include the N2.8 billion farm out of its EEZ 5 and 12
blocks, and the N3.7 billion sale of its Akute
Independent Power Plant.
The new gas and power partnership with Helios is also testament to Oando’s legacy of continuous growth through audacious acquisitions and successful partnerships, most notably its landmark $1.5 billion acquisition of ConocoPhillips Nigeria in 2014, which positioned it as Nigeria’s largest indigenous crude oil producer at 55,000 boep/d. The transaction remains the first and only acquisition of an IOC operating in Nigeria by an indigenous firm.
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