Oando Plc, the Nigerian energy company that announced a share offer yesterday, fell to the lowest in nine years on concern the amount raised will be insufficient to cover debt.
The stock dropped by the daily limit of 5 percent to close at 12.21 naira in Lagos, its lowest since May 2003.
Oando will raise 35 billion naira ($222 million) in an offer to existing shareholders in the fourth quarter to cut debt and increase crude exploration, Chief Executive Officer Wale Tinubu said in a statement yesterday to the Johannesburg Stock Exchange. He gave no details of Oando’s debts.
“Investors’ perception is that compared to the company’s debts, the amount they are raising is too small,” Raheem Mohammed, chief operating officer of Kundila Finance Ltd., said by phone today.
Oando has expanded its operations in Africa’s top oil producer to include crude and gas exploration and production, with additional plans to build a fuel-receiving terminal and refinery in Nigeria’s commercial capital, Lagos.
Oando shares have fallen 45 percent this year, compared with a 24 percent rise in the Nigerian Stock Exchange All-Share Index.