Oando Plc has agreed to sell 49 per cent equity stake in its midstream subsidiary, Oando Gas and Power (OGP) Limited to a new major investor for $115.8 million (about N34 billion), at the current official exchange rate of N305 per dollar. A regulatory filing at the Nigerian Stock Exchange (NSE) yesterday indicated that Oando has reached definitive agreement to sell the 49 per cent equity stake and voting rights in OGP to a Special Purpose Vehicle (SPV) owned by Helios Investment Partners LLP (Helios), a premier Africa-focused private investment firm.
Upon completion, Oando will retain 49 per cent equity stake and voting rights in OGP, while a Nigerian firm would hold the remaining two per cent. However, the agreed transaction consideration of $115.8 million is subject to the receipt of regulatory approvals and customary purchase price adjustments. OGP is widely regarded as the pioneer developer of Nigeria’s foremost natural gas distribution network and has subsequently grown to become the largest private sector gas distributor in the country. It delivers at peak, 70 million standard cubic feet per day (mmscf/d) to over 175 industrial and commercial customers via its vast gas infrastructure network.
With over 260km in pipeline infrastructure built, OGP provides energy solutions primarily through three subsidiaries including Gaslink Nigeria Limited (Gaslink), Gas Network Services Limited (GNSL), and Central Horizon Gas Company (CHGC).
Its Group Chief Executive Officer, Oando Plc, Mr. Wale Tinubu said the strategic alliance will firmly leverage on the group’s local knowledge and expertise and Helios’ strong financial capabilities to build a more formidable company that will exceed existing performance. “Through the optimization of our existing business operations and the expansion of our footprint, we will revolutionize the sector and position gas as a key driver for Nigeria’s economic empowerment. We look forward to completing the transaction, which will create a formidable leader of gas and power solutions in sub-Saharan Africa,”
In his remarks, co-founder and managing partner, Helios Investment Partners, Tope Lawani said the transaction was consistent with Helios’ strategy of investing in businesses that provide cost-effective and reliable energy access solutions. “We look forward to supporting OGP’s continued growth and working with all stakeholders to improve the reliability of gas supply to the company’s numerous industrial customers, who all play a critical role in the growth of the economy,’’ Oando had earlier used the same arrangement to conclude partial divestment of its downstream business.
HV Investments II BV (HVI), a consortium of new core investors, had injected $210 million into the downstream operations of Oando as part of highlights on partial divestment of equitystake in the energy group’s downstream operations. HVI, a joint venture owned by Helios Investment Partners (Helios) and the Vitol Group (Vitol).
Under the divestment and recapitalization deal, a new company will be formed to hold interests in Oando Marketing Limited, Oando Supply & Trading Limited, Apapa SPM Limited, and Oando Trippmart Limited.
Oando Plc will retain 49 per cent shareholding in the newly formed corporate vehicle, with the consortium owning 49 per cent, and the residual two per cent owned by a local entity. The new company will be renamed OVH Energy (OVH) to reflect its ownership structure and the commitment of its new shareholders.