Oando sells 49% stake in downstream ops for N35bn to Helios Investment Partners LLP, a private investment firm focused on Africa.
Oando Plc, a Nigerian energy group said it has completed a $115.8m (N35.3bn) partial divestment of its midstream subsidiary, Oando Gas and Power Limited, to Glover Gas & Power B.V., owned by Helios Investment Partners LLP, a private investment firm focused on Africa.
The deal sees Helios acquire 49% of voting rights, while infusing cash into OGP and the Oando Group.
OGP is the pioneer developer of Nigeria’s foremost natural gas distribution network and had subsequently grown to become the country’s largest private sector gas distributor, delivering at peak 70 million standard cubic feet/day to over 175 industrial and commercial customers via a vast network of gas infrastructure.
The company has over 260km in pipeline infrastructure built to provide energy solutions in the South-East and South-West primarily through its subsidiaries, Gaslink Nigeria Limited, Gas Network Services Limited and Central Horizon Gas Company.
Group Chief Executive Officer, Oando, Adewale Tinubu said, “The commencement of this strategic partnership underlines Oando’s status as the indigenous partner of choice for international firms in our industry, while also acknowledging the group’s unwavering commitment to improving access to gas and power solutions for industries, consumers and commercial counterparties in the sub-region.”
He believes this partnership will strongly leverage OGP’s local expertise and Helios’s global network and financial capabilities, for optimization of existing operations and expansion of footprint.
Tope Lawani, Co-founder and Managing Partner, Helios Investment Partners said, “The completion of the transaction underscored Helios’ commitment to investing in businesses that deliver energy access solutions to industries and consumers across the continent.
“We look forward to working closely with the OGP management team and other industry stakeholders to consolidate the company’s position as a premier provider of cost-effective and reliable gas and power infrastructure.”
“Amid a global downturn and pressured crude oil prices, the deal is another defining moment in Oando’s optimisation of its balance sheet and asset portfolio. By proactively implementing a strategic direction centred on self-sustaining entities, the company is addressing its immediate objective of aggressive debt reduction, while remaining a viable player in the sector,” it added.
The new partnership with Helios is a proof of Oando’s legacy of continuous growth through audacious acquisitions and successful partnerships, most notably its landmark $1.5bn acquisition of ConocoPhillips Nigeria in 2014.
Helios has invested in the African oil and gas sector, and partnered Vitol to acquire about $1bn 40% stake in the African downstream fuels business of Royal Dutch Shell.
Oando completed a $210m recapitalisation of its downstream business with the consortium earlier in 2016.