Oando Plc, a Nigerian energy company, received regulatory approval for a rights offer to raise 54.6 billion naira ($347 million) to repay a loan and buy assets.
The Lagos-based company will start the sale on Dec. 28 and will close it on Feb. 6, it said in a statement on the Johannesburg Stock Exchange today. Oando first proposed an offer of 35 billion naira in September.
Part of the proceeds will be used to repay some of a 60 billion-naira syndicated loan used to purchase exploration and production assets, including swamp drilling rigs in Africa’s biggest oil producer. Oando also plans to use the offer to fund acquisitions by its energy unit and for working capital.
“We are at the final stages in the execution of our overall strategy to increase our exposure to the upstream sector whilst reducing the dependence on the downstream,” Chief Executive Officer Wale Tinubu, said in the statement. In the oil industry, upstream refers to exploration and production, while downstream refers to refining and retailing.
Oando’s shares listed on the Nigerian Stock Exchange have dropped 40 percent this year to 13.1 naira at the 2:30 p.m. close today compared with a 33 percent rise in the Lagos-based bourse’s All-Share Index.