Lagos – Oando has announced plans to raise N50 billion from the capital market through rights issue to its existing shareholders.
A statement issued by the company in Lagos said that the company planned to conclude the transactions by the second quarter of 2014.
The statement said that the company would hold an Extra-Ordinary General Meeting on February 18 to seek shareholders’ approval for the rights issue.
It said that the new funds were to increase the company's authorised share capital to N7.5 billion from the current N5 billion.
The move, according to the statement, is a key component of Oando's overall strategy to reduce its reliance on debt and loans.
The statement quoted, Wale Tinubu, Oando’s Group Chief Executive Officer, as saying that proceeds from the rights issue would be used for debt reduction and enhancement.
''It is necessary to optimise our balance sheet by funding our operations where necessary through equity as opposed to expensive sources of debt to maximise long-term shareholder value," Tinubu said.
Tinubu, however, emphasised the company's three-pronged approach of transformation, debt reduction and enhanced return to shareholders.
“We are working arduously to provide the ideal platform to ensure readiness for further transformation with stronger cash flow".
He assured that the company would minimise cost of capital in order to increase returns to all stakeholders.