Forte Oil raises N9 billion debt to finance expansion

18 Nov 2016
Financial Nigeria


Forte Oil said the five-year bond is the first tranche of a proposed N50 billion bond issuance programme.

Femi Otedola, Chairman, Forte Oil

Forte Oil, a leading Nigerian petroleum marketing company, has successfully raised N9 billion from a bond offering, according to a statement released on Friday. The company said the funding will be used to refinance existing short term bank loans and fund retail outlet expansion.

“With the raising of this initial capital which has been fully underwritten shows the confidence the investing public has in Forte Oil Plc as an investment of choice,” said Akin Akinfemiwa, Forte Oil’s Group CEO. “This bond programme being the first in the downstream sector, is testament to Forte’s position within the downstream sector and allows the company actualise the vision of the Board to continue to provide value to its shareholders regardless of the economic climate.”

Forte Oil said the five-year bond is the first tranche of a proposed N50 billion bond issuance programme. The bond will be listed on the Nigerian Stock Exchange and the FMDQ OTC Exchange until its maturity date in 2021, the company said. United Capital served as the lead financial advisor/issuing house on the bond offering while Boston Advisory, FBN Capital, Planet Capital, and Vetiva Capital Management served as joint financial advisors/issuing houses. Global Credit Rating Company (GCR) has assigned an issuer rating of A- long term and A1- short term to Forte Oil.

“This series provides us with the necessary liquidity to actualize our growth strategies and positions the Company for the years ahead,” said Julius Omodayo-Owotuga, Forte Oil’s Group Executive Director, Finance and Risk. “The pricing of this debt instrument demonstrates the markets’ belief in us and the pricing would help reduce our borrowing cost and increase profitability in the short and long term.”

Forte Oil, formerly African Petroleum (AP), operates over 500 fuel service stations across Nigeria. The company also controls Amperion Power Distribution Company Limited, the owner of the 414MW Geregu Power Plant located in Kogi State. In September 2015, Mercuria Energy Group, a Swiss oil and gas commodity-trading giant, acquired a 17 percent stake in Forte Oil for $200 million. Nigerian billionaire businessman, Femi Otedola, owns majority shareholding in Forte Oil.

In nine months ended on September 30th this year, Forte Oil said revenue rose 32 percent year-on-year to N121.08 billion while pre-tax profit rose 7 percent year-on-year to N5.63 billion. As at 11.19am on Friday, Forte Oil’s stock traded at N82.67 per share, down 5 percent from the previous day’s close.

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