Oando Sells 25% Stake in Axxela Ltd for $41.5m to Reduce Debt
By Modupe Gbadeyanka
Leading Nigerian energy group, Oando Plc, has announced the sale of its residual 25 percent interest in Axxela Limited (formerly Oando Gas & Power Limited).
A statement issued by the firm disclosed that the divestment was worth $41.5 billion and proceeds from the transaction would be used to sort the debts of Oando Plc.
According to the statement, Oando’s residual 25 percent interest in Axxela Limited was held through Glover Gas & Power B.V., but has now been transferred to Helios Investment Partners, a leading private equity firm with a focus on investments in Africa.
It was explained that the acquisition by Helios was effected through HIP GLOVER S.à.r.l, a special purpose vehicle incorporated by Helios, which in 2016 had acquired the initial 75 percent interest in Axxela for $115.8 million.
Group Chief Executive of Oando Plc, Mr Wale Tinubu, described the sale as a win for the energy group.
“The completion of this divestment signifies another win for the company. We pioneered the development of Nigeria’s foremost natural gas distribution network which has subsequently grown to become the largest private sector gas distributor in Nigeria creating a lasting impact on both the sector and the Nigerian economy.
“The divestment further reinforces Oando’s ability to create value that can be monetized and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria.
“This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.
“We will continue to maintain significant presence in the midstream as well as grow our gas aspirations via our upstream gas assets in our NAOC Joint Venture wherein we have four gas projects within the NNPC’s Seven Critical Gas Development Projects (CGDPs), which are responsible for almost 50 percent of the 42 TCF that will be delivered by the seven CGDPs by 2020.”
Also commenting, CEO of Axxela Limited, Mr Bolaji Osunsanya, said, “As we position to become the preferred and fast-growing gas and power portfolio across sub-Saharan Africa, we pay homage to our origins, legacy, and storied history as an Oando portfolio company.
“We are immensely proud of our impressive track record of building substantial gas and power infrastructure across Nigeria, and implementing essential Corporate Social Responsibility initiatives in our host communities.
“As we commence a new journey, our audacious growth initiatives across Nigeria and the sub-region will leverage our industry expertise, experience, and longevity; while our affiliation as a full-fledged Helios company will improve our access to capital.
“The continued growth, robustness, and stability of our business enterprise, enables Axxela provide required efficient and environmentally-friendly energy solutions for industrial and commercial clients, leading to positive socio-economic impact in our markets of operation.”