Forte Oil suspends N20b offer

0

The board of directors of Forte Oil Plc has decided to suspend the energy group’s bid to raise new equity funds. Forte Oil had earlier secured regulatory approval to float a supplementary capital raising through a book building.

Company Secretary, Forte Oil, Akin Olagbende, in a statement released at the Nigerian Stock Exchange (NSE), stated that the board had taken a strategic decision to put the offering on hold pending the conclusion of an ongoing corporate restructuring.

According to him, the company is currently exploring opportunities to maximize emerging opportunities in the Nigerian energy sector, which will be to the ultimate benefit of all stakeholders.

Forte Oil had started the book building for its N20 billion offer for subscription with main consideration for qualified institutional investors and high net worth individual investors.

Forte Oil had planned to raise N20 billion in new equity funds under its new capital raising, after it successfully raised N9 billion in debt issue. The indigenous energy company has approval to raise up to N71 billion under a N100 billion capital raising programme approved by the shareholders of the company.

Forte Oil had opened up the book building for the N20 billion offer through a notification to stockbrokers. The book building was targeted at high net worth institutional and individual investors as defined under the rules and regulations of the Securities and Exchange Commission (SEC).

SEC identifies qualified institutional investors to include an individual investor with at least personal net worth of N300 million excluding automobiles, homes and furniture. Others qualified institutional investors included fund managers, insurance companies, investment and unit trusts, multilateral and bilateral institutions, market makers, professionally-managed staff securities purchase schemes, trustees and custodians and stockbroking firms.

Group Executive Director, Finance and Risk Management, Forte Oil Plc, Mr. Julius Omodayo-Owotuga, had explained that the capital raising would be used to boost working capital and operations.

He said the net proceeds will provide the company with the necessary liquidity to actualise its growth strategies.

He noted that Forte Oil plans to raise funds from its shelf programme in tranches, on the basis of emerging opportunities, in order to ensure that investors receive optimal value for their investments.

Omodayo—Owotuga said the company plans to acquire upstream assets and related downstream businesses as it seeks to grow its portfolio and enhance future returns.

According to him, the company would explore inorganic option of mergers and acquisitions to consolidate its growing market share in the oil and gas business while strengthening its balance sheet to support long-term growth objective.

“We have five pillars of strategies going forward. We want to concentrate on high-margin products. We want to focus on lubricants.  We have been working on our LPG as we improve our facility in Abuja, Kano and Apapa. We want to strengthen our balance sheet. We want long term capital so that interest expenses will come down.  Diversification is part of our strategy to boost out revenue base. We want to buy upstream assets; we will focus on mergers and acquisition within the space available. We have been growing our market share organically. We are looking at opportunity to grow the retail outlet through inorganic strategy,” Omodayo-Owotuga said.

 

TribuneonlineNG