Oando Plc, an indigenous energy group, has announced the completion of a $115.8m (N35.3bn) partial divestment of its midstream subsidiary, Oando Gas and Power Limited, to Glover Gas & Power B.V., a special purpose vehicle owned by Helios Investment Partners LLP, an Africa-focused private investment firm.
The deal, according to a statement on Tuesday, will see Helios acquire 49 per cent in voting rights, while injecting cash into OGP and the larger Oando Group.
The Group Chief Executive Officer, Oando, Adewale Tinubu, was quoted as saying, “The commencement of this strategic partnership underlines Oando’s status as the indigenous partner of choice for international firms in our industry, while also acknowledging the group’s unwavering commitment to improving access to gas and power solutions for industries, consumers and commercial counterparties in the sub-region.
“This partnership will firmly leverage OGP’s local knowledge and expertise, alongside Helios’s global network and financial capabilities, to optimise our existing operations and expand our footprint.”
The Co-founder and Managing Partner, Helios Investment Partners, Tope Lawani, said, “The completion of the transaction underscored Helios’ commitment to investing in businesses that deliver energy access solutions to industries and consumers across the continent.
“We look forward to working closely with the OGP management team and other industry stakeholders to consolidate the company’s position as a premier provider of cost-effective and reliable gas and power infrastructure.”
According to the statement, the new partnership with Helios is also testament to Oando’s legacy of continuous growth through audacious acquisitions and successful partnerships, most notably its landmark $1.5bn acquisition of ConocoPhillips Nigeria in 2014.
The statement described the OGP as the pioneer developer of Nigeria’s foremost natural gas distribution network and had subsequently grown to become the largest private sector gas distributor in the country, delivering at peak 70 million standard cubic feet per day to over 175 industrial and commercial customers via a vast network of gas infrastructure.
According to it, with over 260km in pipeline infrastructure built, OGP provides energy solutions in the South-East and South-West primarily through its subsidiaries, Gaslink Nigeria Limited, Gas Network Services Limited and Central Horizon Gas Company.
“Amid a global downturn and pressured crude oil prices, the deal is another defining moment in Oando’s optimisation of its balance sheet and asset portfolio. By proactively implementing a strategic direction centred on self-sustaining entities, the company is addressing its immediate objective of aggressive debt reduction, while remaining a viable player in the sector,” it added.
According to the statement, since 2011, Helios has made investments in the African oil and gas sector, and partnered Vitol to purchase an estimated $1bn 40 per cent stake in the African downstream fuels business of Royal Dutch Shell.
Oando also completed a $210m recapitalisation of its downstream business with the consortium earlier in the year.
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