Oando Secures $800m Afreximbank Loan for NAOC Acquisition

November 15, 2023
afreximbank Oando deal

By Bliss Okperan

An $800 million loan has been secured by Oando Plc from the African Export-Import Bank (Afreximbank) at the ongoing Intra-African Trade Fair in Cairo, Egypt.

The syndicated duel credit facility is to be used by the Nigerian energy firm for a 20 per cent participating interest in the Nigerian Agip Oil Company (NAOC) Limited.

The lender, in a statement through its official X handle on Wednesday, said the loan comprises a $500 million Senior Secured Reserve Based Lending facility and a $300 million Receivables Backed Term Loan facility.

Recall that a few months ago, Oando, headed by Mr Wale Tinubu, announced that it had acquired a 100 per cent stake in the Nigerian subsidiary of Italian oil giant, Eni, for an undisclosed sum.

Since then, many stakeholders, including the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have kicked against the transaction.

A few weeks ago, some local contractors asked President Bola Tinubu to interfere in the matter, threatening to occupy all facilities belonging to Agip in the Niger Delta over contract debts.

This new funding support from Afreximbank may have come at the right time, as it would enable Oando to settle all financial issues arising from the acquisition.

“Afreximbank has confirmed the signing of a Mandate Letter for an $800 million Syndicated Dual Facility with Oando. This financial package comprises a $500 million Senior Secured Reserve Based Lending facility and a $300 million Receivables Backed Term Loan facility.

“The aim is to fuel a strategic acquisition of a 20% participating interest in the Nigerian Agip Oil Company Limited (NAOC). This includes Oil Mining Leases 60, 61, 62, and 63, as well as the entire issued share capital of NAOC, acquired from Eni S.A.

“This move perfectly aligns with the Afreximbank’s unwavering commitment to supporting indigenous African institutions. The facility underscores our dedication to financing transactions that not only boost Africa’s trade but also empower local companies by transferring capacity from foreign institutions to African hands.

“This acquisition is a pivotal moment for Oando, propelling it to new heights in the oil industry by significantly enhancing its production capacity. Beyond that, this financing is a shining example of Afreximbank’s prowess in mobilizing capital for robust transactions within its member nations,” the statement from the bank said.

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