Since Oando released its audited financials for 2021, investors dealing on the Nigerian Exchange have been clamouring for its shares.
Oando was the top gainer on Tuesday, rising 10% as demand for the stock vastly outstripped supply. Investors continued to compete for shares on Wednesday, sustaining the bullish momentum. The stock had almost no sellers as of the early afternoon, signaling a strong purchasing attitude.
The stock was up 9.7% by 11:30 a.m., with over 30 million shares available for purchase and no bids being considered. In general, share prices are expected to experience upward pressure when purchasing demand outpaces selling.
Pre-tax profits for the entire year of 2021, as reported by Oando Plc in its audited accounts, increased by 133.12% year over year to N44.474 billion.
The reversal of impairment of non-current and trade receivables, which totaled N104.382 billion, is substantially responsible for Oando’s extraordinary increase in pre-tax profit for the fiscal year 2021.
The company also reported a significant 68.42% gain in revenue, which was primarily driven by a rise in crude oil sales, the primary driver of the company’s overall revenue growth.
It’s important to remember, though, that despite these encouraging numbers, Oando nevertheless posted a comprehensive loss of N28.1 billion for the fiscal year that ended on December 31, 2021.
Although the N45.3 billion loss reported in 2020 has been reduced, the corporation nevertheless reported negative operating cash flows totaling N14.4 billion.
In an effort to increase its financial stability, Oando also announced that ten Nigerian banks had joined forces with it in order to restructure its medium-term loan.
The original contract has been modified, and the total commitment now stands at N115.3 billion instead of N108.3 billion.
Oando still has to deal with existential issues that have an impact on its ability to continue operating.
It recently revealed that it needs roughly N768 billion to close the financing deficit for 2023 in the notes to its 2021 accounts and plans to issue a ten year bond of N568.6 billion.
On March 30, 2023, Oando informed NGX and JSE Limited of OODP’s intention to purchase all of the shares held by minority shareholders. Oando would be delisted from the NGX and JSE as a result of this transaction, and it would then be reregistered as a private business.
In accordance with Section 715 of CAMA, the proposed transaction would be carried out via a Scheme of Arrangement. The value of each qualifying shareholder’s share will be N7.07 in cash or its equivalent in South African Rand, which is 58% more than Oando’s last traded share price on March 28, 2023. Currently trading at N14, the share price is growing.
Oando has asked the Securities and Exchange Commission for a “No Objection.” The Federal High Court’s sanction and shareholder approval are both necessary for the scheme to be successful.
On May 22, 2023, Honourable Justice Aneke postponed the case until October 10, 2023 so that Oando could abide by a judgement of June 7, 2022 and provide the court with an update on the Scheme of Arrangement.
