Oando secures N94.6 billion restructuring loan deal

07 Jun 2016
Financial Nigeria


The facility is part of a strategic debt restructuring plan to enhance profitability.

Wale Tinubu, Group Chief Executive, Oando Plc

Oando, a leading Nigerian indigenous oil and gas company, said on Monday that it has obtained a N94.6 billion loan facility from 10 Nigerian banks as part of a strategic debt restructuring plan to enhance profitability.

The company said the facility is a five-year term loan, with a 3-year moratorium on the principal, given at the Nigerian interbank rate plus 2 percentage points.

“In a bid to return to profitability in 2016, I am happy to announce the successful completion of restructuring our overall debt profile,” said Wale Tinubu, Oando’s Group Chief Executive. “This is the pivotal leg in our Group restructuring plan of growth via the upstream business; deleverage, via the disposal of $350 million in assets’ value in 2016; and return to profitability in 2016 driven by our dollar earning oil export and trading activities.”

The ten banks that provided the financing are: Access Bank, the lead arranger, Diamond Bank, Ecobank, FCMB, Fidelity Bank, Keystone Bank, Stanbic IBTC Bank, UBA, Union Bank, and Zenith Bank.

Although Oando is yet to release its 2015 full-year results, in the nine months ended on September 30, 2015, the company posted an after-tax loss of N47.65 billion. This followed a record loss of N183.89 billion declared in 2014 after Oando paid $1.65 billion to acquire the Nigerian operations of ConocoPhillips, an American oil giant.

Oando’s Group Executive said, “The company now stands diversified with higher weighted dollar denominated earnings, an optimized and restructured balance sheet with lower cost of capital and longer tenors.”

“With the upturn in the global oil prices to levels above $50 per barrel, we now look forward to the successes of 2016, having ridden out the storm,” Tinubu added.

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