Oando Plc, a leading Nigerian energy company, has announced its plans to delist from the Nigerian Stock Exchange (NSE) and acquire the shares of minority shareholders. However, some shareholders have expressed concerns over the proposed move, citing a lack of transparency and inadequate compensation for their shares.
According to a corporate notice issued by the company, its core investor, Ocean, and Oil Development Partners Limited, has proposed to acquire the shares of minority shareholders at the rate of N7.07 per unit. This is below the current trading price of Oando’s shares, which closed at N5.75 per unit on the NGX on Monday.
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Reactions of shareholders
Reacting to the development, Sunny Nwosu, the Emeritus Chairman of the Independent Shareholders Association of Nigeria, criticized the company for neglecting the interests of shareholders. Nwosu pointed out that Oando shareholders have not received any dividends in the last 10 years, and that the proposed acquisition is unfair to them.
Kehinde Olowolafe, the Coordinator of the Sage Shareholders Association in Ibadan, also expressed concerns over the proposed delisting and acquisition. While he acknowledged that it was within Oando’s right to exit the market, he stressed the need for regulators to ensure that minority shareholders are not cheated.
Also read: Oando Plans to Acquire Shares of Minority Shareholders
Oando’s application to SEC
Oando Plc has applied to the Securities and Exchange Commission (SEC) for a “No Objection” to the transaction. The company has stated that the delisting and acquisition are aimed at improving its operational efficiency and reducing the regulatory burden on the company.
However, minority shareholders are calling for more transparency and a fair valuation of their shares. They have urged the company to engage in more dialogue with stakeholders and provide more information regarding the proposed transaction.
An Overview
Oando Plc is one of the largest energy companies in Nigeria, with operations in oil exploration, production, marketing, power generation, and distribution. The company reported a profit after tax of N34.7 billion in the 2021 financial period. Other companies that have delisted from the NSE include 11 Plc, formerly Mobil Oil Nigeria Plc, and Studio Press Nigeria Plc.
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