Oando Plc, an indigenous energy company, at the weekend
announced a successful $550 million participation in the Project Gazelle
financing deal, raising the total disbursed amount to $925 million in the deal
sponsored by the Nigerian National Petroleum Company Limited (NNPCL).
Arranged and coordinated by Afreximbank, the accordion
arrangement saw the raising of a combined total of the $925 million from a
consortium of crude oil off-taker lenders, including the Oando Group, Sahara
Energy, among other energy companies.
This brought the total funded facility size for Project
Gazelle to $3.175 billion, a statement from the company said.
Project Gazelle is a $3.3 billion structured crude
oil-backed forward-sale finance facility.
The unique financing arrangement is backed by crude oil
allocation from the royalties and tax entitlements of the Nigerian government
and is a first of its kind in Africa’s largest economy.
The statement added that it was designed to enable the
much-required forex injection into Nigeria’s economy, helping the government
meet its immediate obligations.
It is also expected to enable investments in critical
projects to boost production and in turn, generate increased revenues, part of
which would be used in paying off the facility over a five-year period, it
noted.
Speaking on Oando’s participation, Group Chief Executive,
Oando Plc, Wale Tinubu, said the transaction further reinforces Oando’s ability
to create value and the company’s status as the indigenous partner of choice in
Nigeria.
“The successful completion of this facility signifies
another win for the company and the country at large. The transaction further
reinforces Oando’s ability to create value and the company’s status as the
indigenous partner of choice in Nigeria.
“As a proudly indigenous company, our ambition has always
been to use our platform to support the sustainable development of the nation.
Against this backdrop, Project Gazelle will be instrumental in realising the
federal government’s efforts to boost the country’s socio-economic indices.
“Afreximbank as lead arranger continues to support African corporations –
public and private growing confidence in the market and continent,” Tinubu stated.
One of the key reasons given for the novel Project Gazelle,
Oando said, was its ability to avail the federal government in the immediate to
medium term with access to the funding for investments in critical sectors that
will help in reversing some negative economic indices and trends, while
positively impacting the lives of its citizens.
In a joint statement with Afreximbank, NNPCL’S Group CEO,
Mele Kyari commended the bank’s management and team for their investment
philosophy and active interest in co-creation of prosperity.
“The successful disbursement of the first accordion under
Project Gazelle and its interest in funding viable and strategic projects is a
clear indication of investors’ confidence in NNPCL and Nigeria’s growth
aspirations,” he said.
He further assured Afreximbank and all investing communities
of NNPCL’s resolve to continue to grow the nation’s hydrocarbon resources and
strengthen its partnerships across the oil and gas value chain locally, and
globally.
Commenting on the disbursement, President & Chairman of
the Board of Directors, Afreximbank, Prof. Benedict Oramah, said the funding
will greatly support the attainment of Nigeria’s short and long-term economic
development priorities
“The milestone achieved thus far, on this facility,
demonstrates the bank’s capabilities in performing its role as a crucial
development partner for Africa. It reaffirms our commitment to assisting our
member states in their efforts to achieve economic growth and stability.
“This funding will greatly support the attainment of
Nigeria’s short and long-term economic development priorities,” he stated.
Oramah described the original facility as ‘a landmark’ for
being the largest crude oil-backed facility in Nigeria and one of the largest
syndicated debts raised in Africa.
He added that the closure of the first accordion
demonstrated the existence of positive market appetite for well structured
commodities-backed instruments.
In its second win for the week, Oando announced the lifting
of the suspension of the company’s secondary securities listing on the
Johannesburg Stock Exchange (JSE).
After a two-month suspension, the JSE’s recent action means
investors in South Africa are now able to trade in Oando’s securities on the
country’s exchange, it said.
Furthermore, Oando said it saw a positive swing in its NGX
share price appreciating by 52.8 per cent between April 28 to June 6, 2024, a
period that saw the company release its audited FYE2022 results and shortly
after at the end of May, its interim FYE2023 results.
It pointed out that investors had shown a strong and
positive response to the release of the company’s 2023 unaudited financial
reports which showed a major recovery for the indigenous energy company.
“Oando’s FYE2023 interim report showed a 71 per cent
increase in turnover from N1.9 trillion in 2022 to N3.4 trillion in 2023 as
well as a Profit after Tax position of N74.7billion, a 192 per cent increase
from the preceding year.
“After recent upheavals, it looks like exciting times are
ahead for Oando, its shareholders, the investing public and the Nigerian
economy,” said the statement.