DLA Piper has advised Oando PLC (Oando), Nigeria’s leading indigenous energy group, listed on both the Nigerian and Johannesburg Stock Exchange, on a $210 million recapitalisation and partial divestment of its downstream operations. HV Investments II B.V., a joint venture owned by Helios Investment Partners, a premier Africa-focused private investment firm, and the Vitol Group, the world’s largest independent trader of energy commodities, will acquire the equity stake.
This recapitalisation will see the formation of a new company, OVH Energy, which will hold interests in Oando Marketing Limited, Oando Supply & Trading Limited, Apapa SPM Limited, and Oando Trippmart Limited. Oando will retain 49% shareholding in the newly formed corporate vehicle, with the consortium owning 49%, and the residual 2% owned by a local entity.
The newly formed company's assets will comprise over 350 service stations in Nigeria with supporting infrastructure, including 84,000 tonnes of storage and a newly built inbound logistics jetty. The new business will be the second largest downstream fuels company in Nigeria, with a market share of 12 per cent.
This transaction is the largest capital inflow into the Nigerian downstream sector in 2016 and the injection of fresh funds will be used for the recapitalisation of Oando’s downstream operations. The partnership leverages Oando’s sector dominance, local knowledge and expertise, with HVI’s vast international, financial and technical capabilities to reinvigorate and build West Africa’s largest downstream company.
DLA Piper's London Oil & Gas team head, Charles Morrison, who led on the deal said: "Declining oil prices have undoubtedly had an impact on the African energy sector but it's practical and strategic moves - such as the one that Oando has chosen to make - that will ultimately allow companies to continue to grow, develop and prosper in a tough economic climate."
The DLA Piper's Oil & Gas team included Charles Morrison, senior associates William McCann and Simon Collier, associates Lauren Kelsall, Jack Edmonson and Felix Ndi-Obiosa (all Finance & Projects Group, Oil & Gas team).
