Oando Plc Thursday said it has divested its residual 25 per cent interest in Axxela Limited (formerly Oando Gas & Power Limited) to Helios Investment Partners, a leading private equity firm with a focus on investments in Africa.
In a notification to the Nigerian Stock Exchange (NSE), Oando said the total purchase price for the transaction was $41,500,000, thereby optimising value from a non-core business activity of the group.
According to the company, the net proceeds of the transaction will be applied in partially prepaying the group’s medium term loan. Helios had in 2016 had acquired the initial 75 per cent interest in Axxela for $115.8 million.
Commenting on the divestment, Group Chief Executive,Oando Plc, Wale Tinubu said: “The completion of this divestment signifies another win for the company. We pioneered the development of Nigeria’s foremost natural gas distribution network which has subsequently grown to become the largest private sector gas distributor in Nigeria creating a lasting impact on both the sector and the Nigerian economy.
“The divestment further reinforces Oando’s ability to create value that can be monetised and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria. This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.
“We will continue to maintain significant presence in the Midstream as well as grow our gas aspirations via our upstream gas assets in our NAOC Joint Venture wherein we have four gas projects within the NNPC’s Seven Critical Gas Development Projects (CGDPs), which are responsible for almost 50 per cent of the 42 TCF that will be delivered by the seven CGDPs by 2020.”
Also commenting, CEO, Axxela Limited, Bolaji Osunsanya added: “As we position to become the preferred and fast-growing gas and power portfolio across sub-Saharan Africa, we pay homage to our origins, legacy, and storied history as an Oando portfolio company. As we commence a new journey, our audacious growth initiatives across Nigeria and the sub-region will leverage our industry expertise, experience, and longevity; while our affiliation as a full-fledged Helios company will improve our access to capital. The continued growth, robustness, and stability of our business enterprise, enables Axxela provide required efficient and environmentally-friendly energy solutions for industrial and commercial clients, leading to positive socio-economic impact in our markets of operation.”