Investors trading on the Nigerian Exchange are clamoring for Oando shares in the wake of the company releasing its audited financials for 2021.
On Tuesday, Oando led the gainers, surging by 10% as demand for the stock significantly outstripped supply. This bullish momentum carried into Wednesday, with investors continuing to vie for shares. As of early afternoon, the stock had virtually no sellers, indicating a strong buying sentiment.
By 11:30 a.m., the stock had already risen by 9.7%, with over 30 million shares awaiting buyers and zero offers on the table. Generally, when buying interest outpaces selling, share prices are likely to experience upward pressure.
Oando 2021 Results
Oando Plc released its audited results for the full year of 2021 showing pre-tax profits grew by 133.12% year on year, reaching N44.474 billion.
- Oando’s remarkable surge in pre-tax profit for the fiscal year 2021 can largely be credited to the reversal of impairment of non-current and trade receivables, which totaled N104.382 billion.
- Additionally, the company posted a robust 68.42% increase in revenue, a boost primarily fueled by crude oil sales, which were the main contributor to the company’s overall revenue growth.
- However, it’s crucial to note that despite these favorable figures, Oando still recorded a comprehensive loss of N28.1 billion for the year ending December 31, 2021.
- While this represents an improvement from the N45.3 billion loss reported in 2020, the company also disclosed negative operating cash flows amounting to N14.4 billion.
Oando Debts
In a move aimed at bolstering the financial stability of Oando also reported it had agreed with ten Nigerian banks have joined forces to restructure its Medium-Term Loan.
- The original agreement has been amended, with the overall commitment increasing to N115.3 billion from N108.3 billion.
- The restructuring aims to re-sculpt the repayment profile, extend the loan’s maturity date, and update associated security details.
- Despite the loan deals, Oando also faces existential challenges affecting its going concern status.
It recently disclosed in the notes to its 2021 accounts that it needed about N768 billion to meet its funding gap for 2023 and plans to issue a ten year bond of N568.6 billion.
What you should know
Offer to Acquire Shares: On March 30, 2023, Oando notified NGX and JSE Limited that OODP intends to acquire all the shares held by minority shareholders. This acquisition would lead to Oando’s delisting from NGX and JSE and its re-registration as a private company.
Scheme of Arrangement: The proposed transaction would be executed through a Scheme of Arrangement as per Section 715 of CAMA. Each qualifying shareholder will receive N7.07 in cash or its equivalent in South African Rand (ZAR) per share they own, representing a 58% premium to the last traded share price of Oando on March 28, 2023. The share price is currently N14 and rising.
Regulatory Approvals: Oando has applied for a ‘No Objection’ from the Securities and Exchange Commission (SEC). The effectiveness of the scheme is subject to shareholder approval and the sanction of the Federal High Court.
Court Proceedings: On May 22, 2023, the case was adjourned to October 10, 2023, by Honourable Justice Aneke to allow Oando to comply with a court order dated June 7, 2022, and update the court on the status of the Scheme of Arrangement.