Debt Squeeze: Oando Plans KSh 48.79B ($375.5M) Capital Raise as Analyst Flags Going-Concern DoubtDebt Squeeze: Oando Plans KSh 48.79B ($375.5M) Capital Raise as Analyst Flags Going-Concern Doubt
Key Highlights
- Oando plans a rights issue of about 4.42 billion shares at ₦50 each, expected to raise about KSh 21.54B ($165.8M), as part of a wider capital raise of KSh 48.79B ($375.5M).
- Renaissance Capital cited a material uncertainty relating to going concern, tied to working capital and financing pressures, while total borrowings stood at about KSh 263.78B ($2.03B) at the end of June.
- Net finance costs of KSh 15.74B ($121.1M) exceeded operating profit of KSh 12.47B ($96M) in the half, and shareholders' equity was negative at KSh 51.76B ($398.3M).
Oando Plc plans a rights issue of about 4.42 billion new shares at ₦50 each as part of a wider capital raise worth about KSh 48.79B ($375.5M), while an analyst has flagged a material uncertainty over whether the Nigerian oil and gas group can continue as a going concern.
The plan matters because Oando's borrowings of about KSh 263.78B ($2.03B) at the end of June are large against its earnings. Interest costs absorbed more than the group made from operations in the half, so the fundraising is meant to cut debt rather than fund growth.
The raise in detail
The rights issue is expected to bring in about KSh 21.54B ($165.8M), according to a Billionaires.Africa report that draws on Nairametrics, Edison Group and ThisDay. Oando applied to the Nigerian Exchange in February and still needs clearance from Nigeria's Securities and Exchange Commission and South African authorities.
The broader plan, reported from a Renaissance Capital note, covers a ₦500 billion raise. It includes the rights issue, a $1.5B (KSh 194.91B) multi-instrument issuance programme that Edison says is being updated for resubmission to regulators, and the conversion of $300M (KSh 38.98B) of reserve-based lending into equity. Renaissance estimated that full execution would restore positive shareholders' equity.
At the 17 September annual meeting, shareholders approved a board proposal to list on other exchanges, subject to regulatory approval.
What the half-year numbers show
Oando's total borrowings were about KSh 263.78B ($2.03B) at the end of June, broadly unchanged from December, according to Nairametrics figures for the half-year accounts. Net finance costs were KSh 15.74B ($121.1M), above operating profit of KSh 12.47B ($96M). That left a pre-tax loss of KSh 3.21B ($24.7M).
A tax credit turned the result into a net profit of KSh 6.69B ($51.5M). Revenue rose 20% to KSh 201.41B ($1.55B), mostly from low-margin crude and fuel trading. Edison said interest payments absorbed 55% of operating cash flow.
Total liabilities were KSh 821.20B ($6.32B) against total assets of KSh 769.20B ($5.92B). Shareholders' equity was negative at KSh 51.76B ($398.3M).
Production and the Eni acquisition
The balance sheet carries the cost of the August 2024 purchase of Nigerian Agip Oil Company from Eni for $783M (KSh 101.74B), which lifted Oando's interest in leases 60 to 63 from 20% to 40%. The assets include 40 discovered fields, about 1,490 kilometres of pipelines, three gas plants and the Brass River export terminal.
Production in the first half was 42,789 barrels of oil equivalent a day, up 16% on a year earlier, against 2026 guidance of 40,000 to 50,000. Proved and probable reserves were 928 million barrels of oil equivalent at the end of 2025. Capital spending for 2026 is budgeted at $90M to $100M (KSh 11.69B to KSh 13.00B).
Edison valued Oando at about KSh 272.87 ($2.10) per barrel of proved and probable reserves, a 60% discount to Seplat and 74% to Aradel. The shares closed at ₦35 on 30 September, down from a ₦54.90 peak on 25 May.
What to watch in the approvals
Mwenendo earlier reported on how Dangote Cement lined up a London share sale, showing how Nigerian issuers are courting investors abroad. For Oando, the regulators at the Nigerian Exchange and the SEC will decide how fast the rights issue can proceed, and the going-concern warning stays in place until the equity position is repaired.
The figures come from secondary reports, so investors should check them against Oando's own filings.
In Summary
- Who is raising capital?
- Oando Plc, a Nigerian oil and gas group.
- What is planned?
- A rights issue of about 4.42 billion shares at ₦50 each within a wider raise of about KSh 48.79B ($375.5M).
- When are the figures from?
- Half-year accounts to June 2026; the 17 September annual meeting approved a proposal to list on other exchanges.
- Where does approval sit?
- The rights issue needs clearance from Nigeria's SEC and South African authorities after an application to the Nigerian Exchange.
- Why is it raising money?
- To cut debt of about KSh 263.78B ($2.03B), with interest costs above operating profit.
- How could the raise change the balance sheet?
- Renaissance Capital says full execution, including converting $300M of lending into equity, would restore positive shareholders' equity.