Oando secures 10% debt restructuring

The shares of Oando Plc rose sharply after the oil firm said it has secured $475 million debt restructuring deal with a group of local banks and that it hoped to return to profit this year.

 

The shares which are also listed in Johannesburg and Toronto climbed the maximum 10 per cent al­lowed on the Nigerian Stock Exchange (NSE) to N6.72. The shares fell 63.4 per cent last year.

The company secured the five year loan facility from 10 domestic lenders under plans to restructure its finances and it will sell assets worth $350 mil­lion this year. The full-year 2015 financial results re­leased by the company showed a significant reduc­tion in capital expenditure last year.

 

OER, a subsidiary of the firm focusing on oil and gas exploration and production in Nigeria, announced its financial and operating results for the three and 12 months ended December 31, 2015.

 

As of December 31, 2015, the company had a working capital deficiency of $835.8 million (De­cember 31, 2014 – $567.2 million) and an accumu­lated deficit of $621.2 million (December 31, 2014 – $638.1million).

 

OER said in addition to its ongoing working cap­ital requirements, it must secure sufficient funding to fund ongoing operations and commitments and repay at least $149.9 million in loan principal, as set out by loan repayment schedules.

 

“An additional $356.7 million of borrowings was reclassified to current borrowings as a result of debt defaults; the defaults give the lenders asso­ciated with the senior secured facility and corpo­rate facility the ability to accelerate the maturity of the loans on demand.”