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Oando sells downstream business for $276m

Group Chief Executive Officer, Oando PLC, Wale Tinubu

A consortium of investors on Tuesday announced the
acquisition of 60 per cent of the economic rights and 51 per
cent of the voting rights in the downstream business of
Oando Plc, an integrated oil and gas company, for a sum of

A statement issued by Adeshola Komolafe of Media Insight,
consultants to the consortium, named the consortium
members as Helios Investment Partners and The Vitol

She said the consortium had reached an agreement to
acquire Oando’s downstream businesses subject to the
receipt of regulatory approvals and customary purchase
price adjustments, including working capital.

Komolafe said, “The new downstream and retail business
will be established as a standalone independent company
led by a local management team.

“Its assets will comprise over 400 service stations in
Nigeria with supporting infrastructure, including 84,000
tonnes of storage and a newly built inbound logistics jetty;
as well as complementary businesses, chiefly LPG filling
and distribution, lubricants and an interest in a supply and
bulk distribution company in Ghana.

“The new business will be the second largest downstream
fuels company in Nigeria, with a market share of 12 per

It is anticipated that the service stations will retain the
Oando brand, she added.

Speaking on the deal, the President and Chief Executive
Officer, Vitol, Mr. Ian Taylor, said, “Vitol has a long history
of working in Nigeria and is proud to have served our
customers here over many years. This investment is a
further reflection of our confidence in the Nigerian economy
and will be independent of the services we provide to our
long standing Nigerian customers.

“We are looking forward to building this new downstream
business, alongside our many other business activities in
The Co-founder and Managing Partner, Helios Investment
Partners, Mr. Tope Lawani, said, “This is a market-leading
downstream energy business with a strong brand and
exciting growth potential.

“Given our successful partnership with Vitol to create Vivo
Energy, a leading downstream business, which distributes
and markets Shell branded fuels and lubricants in 16
countries across Africa, we are confident that our expertise
and regional presence will support the management team in
capitalising on its strong market position and the
compelling growth opportunities in Nigeria.”

Oando confirmed the transaction in a statement on
Tuesday, saying that the total consideration of $461.3m
would be funded by a $276.8m cash contribution from HVI
and $184.5m in preference shares issued to Oando Plc,
subject to customary purchase price adjustments, including
working capital and long-term debt.

At closing, HVI will own 60 per cent of the special purpose
vehicle, while Oando will hold a 40 per cent stake.

Commenting on the partnership agreement, the Chief
Executive Officer, Oando, Mr. Wale Tinubu, said, “This
transaction is an exciting development in downstream West
Africa. By working with Vitol, a global energy and
commodities company, and the largest independent trader
of energy products, and Helios, a premier Africa-focused
private investment firm, we have repositioned Oando
Downstream for a new era of investment growth and

“This venture holds unprecedented opportunities for the
business. Importantly, this divestment also enables us to
increase our focus on our upstream and midstream
businesses. Even as proceeds of the sale will be applied
almost entirely to reducing Oando’s leverage, we
underscore the portfolio rationalisation achieved alongside
the balance sheet optimisation.”

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