Oando sells stake in gas firm for $41.5m to cut debt – The Nation Newspaper

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Oil firm, Oando Plc, yesterday said it had sold its 25 per cent stake in local gas and power company Axxela to majority investor Helios Investment partners for $41.5 million as it works on cutting its debt. Oando has in recent years transformed itself from a fuel retailer to an oil producer competing with multinationals such as Shell and Exxon Mobil, but its growth has been largely funded by debt. It hived off its power and gas subsidiaries in 2015, selling a 75 per cent stake in the new business, Axxela, to Helios for $115.8 million in 2016. The Soros-backed private equity firm now owns 100 per cent of Axxela following Oando’s divestment, Axxela said yesterday. Axxela said it delivers up to around 80 million standard cubic feet (scuf) per day to over 160 industrial and commercial customers. “This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses,” Oando said in a statement. Two days ago, Oando’s Chief Executive – Adewale Tinubu – said the oil company aimed to raise fresh capital over the next two years and cut its long-term debt after it bought Conoco Phillips’ Nigerian assets for $1.5 billion in 2013. He told Reuters he was confident with the capital raising initiatives and that over the next 24 months Oando would raise funds as plans were far advanced. Oando said yesterday that it would use the proceeds of the Axxela stake sale to repay part of the group’s term loan. Shares in Lagos-listed Oando, which are down 86 per cent from their peak of N33.47 in 2014, rose 3.1 per cent yesterday.
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