Shareholders Okay Sale of Forte Oil’s Assets in Nigeria, Ghana

By Modupe Gbadeyanka

Earlier this month, it was reported that one of the leading energy firms in Nigeria, Forte Oil Plc, was planning to restructure the company by selling some of its assets in the country and Ghana to focus more on its core fuel distribution operations in Nigeria.

This news came as a big surprise to some observers, who said the directors of the major marketer of refined petroleum products could face a tough resistance from shareholders, who might be against this move.

The fear was fuelled by the fact that Forte Oil, despite posting good financial results for the year ended December 2017, did not propose payment of dividend to its shareholders.

But on Wednesday, May 23, 2018 (today), the company held its Annual General Meeting (AGM) at the Bespoke Event Centre, Lekki-Epe Expressway, Lagos.

At the venue of the meeting today, the atmosphere was tensed with observers not sure if the proposal for the restructuring would be approved.

However, when the matter was raised, Business Post reports that shareholders agreed with the directors on the sale of the company’s operations in Ghana, AP Oil & Gas Ghana Limited.

Chairman of Forte Oil, Mr Femi Otedola, who presided over the 39th AGM today, explained that the reason for this move was to allow the firm focus more on its Nigerian businesses.

According to him, Forte Oil has established itself as a foremost indigenous petroleum marketing company with a rich history and strong operational platforms.

He explained to the shareholders that although power business was profitable, it has huge receivables due from the Nigeria Bulk Electricity Trading Plc (NBET) and a significant portion of its distributed earnings was also utilised in servicing the acquisition debt finance.

The business mogul emphasised that the planned restructuring will have huge positive impact on the company’s earnings, assuring shareholders that they should get reward for this in the 2018 business year through the payment of dividend.

Mr Otedola said despite the challenges the company faced last year, Forte Oil managed to churn out a highly impressive performance.

Business Post reports that the restructuring is expected to take about six to nine months to materialise.

Last year, Forte Oil Plc recorded revenue of N129.4 billion, showing a decrease of 12 percent from N148.6 billion in 2016.

However, its profit after tax increased by 323 percent to 12.2 billion in 2017 from N2.9 billion achieved in 2016.

The firm disclosed in the 2017 earnings that its cost of sales fell to N105.3 billion from N128 billion in 2016, making it to close the year with a gross profit of N24.1 billion, up from N20.6 billion in 2016.

Apart from AP Oil & Gas Ghana Limited to be sold by Forte Oil, other assets on the list include Forte Upstream Services Limited and Amperion Power Distribution Company Limited, where the firm has 100 percent and 57 percent stakes respectively.