By Modupe Gbadeyanka
The management of Japaul Oil and Maritime Services (Japaul Oil) Plc has announced its intention to pull out of the much-publicised $350 million equity injection deal with Milost Global Incorporated.
Milost Global, a private equity company based in the United States, had earlier this year announced its intention to inject the above amount into the Nigerian firm.
This was later confirmed by the management of Japual Oil and caused stocks of the company to experience sharp price appreciation on the floor of the Nigerian Stock Exchange (NSE).
However, a report by Business Day newspaper, analysing the deal showed some red flags, causing the stock price to depreciate broadly at the market.
In its 2017 earnings released some weeks ago, Japual Oil posted weak performance, which caused investors in the capital market to raise eyebrows.
In a notice to the NSE on Tuesday, the management of Japaul Oil said the board agreed to seek ways to withdraw from the transaction with Milost Global “in a non-prejudicial manner.”
It was stated that this decision was reached at the meeting of the board of Japaul Oil held on March 29, 2018.
“Japaul Oil and Maritime Services Plc wishes to notify its shareholders that the board of the company at its meeting held on Thursday, March 29, 2018, deliberated on the proposed equity injection by Milost Global Inc.
“The board resolved that in view of the numerous red flags associated with the proposed equity injection, management should in consultation with the company’s retained counsel, take prompt steps to pull out of the transaction in a non-prejudicial manner.
“Further development regarding this transaction will be communicated in due course,” the statement signed yesterday by the Acting Group Managing Director of Japaul Oil, Mr Akin Oladapo, disclosed.
Adedapo Adesanya