The Managing Director of Oando Nigeria Plc, Mr. Wale Tinubu, has assured investors that the company has put things in place to ensure increased returns to shareholders at the end of the next financial year.
Speaking during the presentation of its Facts Behind the Figures at the Nigerian Stock Exchange on Monday, Tinubu revealed that the company would generate free cash flow to pay substantial amount of the company’s earnings as dividend to shareholders.
According to him, the company’s shares suffered last year as it failed to pay dividends to shareholders.
He said, “I believe we suffered from shareholders’ drop as regards to the value of shares by not paying dividend in the last financial year end. It was a mistake on our part and it sent a wrong signal to the market and I think we have suffered monumentally on the reduction of our shares.
“The second thing we suffered is oil subsidy payment and all these put together, led to panic sales of our shares which impacted negatively on our share price.”
“However, we want our shareholders to be rest assured that non dividend payment is now a thing of the past, there is a substantial effort to reduce the cost of capital to generate more profit. Going forward, the dividend we will pay will actually be as if we are paying salaries in the office and we will do better to move forward in the business.”
The company is issuing N4.548bn shares at N12 per share by way of Rights Issue offer to existing shareholders, to re-finance acquisitions made in the upstream sector of the country’s oil and gas industry, as well as strengthening its balance sheet.
Tinubu noted that the net right issue proceeds, estimated at N52.9bn, after deducting the total cost of the issue estimated at N1.64bn representing 3.01 per cent of the issue, will be applied as follows: N27.8bn or 52 per cent refinancing of upstream assets.
At the close of trading activities on the NSE on Monday, its share price rose by 1.43 per cent or 20 kobo to close at N14.20 kobo per share.