Forte Oil: Femi Otedola to sell 75 per cent holdings in downstream

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Majority shareholder in Forte Oil, Mr. Femi Otedola has concluded arrangement to divest his full 75 per cent direct and indirect shareholdings in the firm’s downstream business.

According to a statement entitled ‘notification of divestment by the majority shareholder in the downstream business operations’ obtained from the Nigerian Stock Exchange (NSE), the company said: “Forte Oil Plc hereby notifies the Nigerian Stock Exchange, Securities and Exchange Commission, shareholders and the investing community that its majority shareholder, Mr. Femi Otedola has reached an agreement with the Prudent Energy team, investing through Ignite Investments and Commodities Limited, to divest of his full 75per cent direct and indirect shareholding in the company’s downstream business.

The notice signed by Akinleye Olagbende, the General Counsel of the company, noted that Mr. Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximise business opportunities in refining and petrochemicals.

“The transaction is expected to close in the First Quarter (Q l) of 2019 subject to the satisfaction of various conditions and receipt of applicable regulatory approvals,” the company noted.

“Standard Chartered Bank, Corporate Finance & Advisory, Dubai and Olaniwun Ajayi LP served as Financial and Legal advisors respectively to Mr. Femi Otedola, while PricewaterhouseCoopers and Stanbic IBTC Capital Limited served as Joint Financial Advisors and Sefton Fross served as legal advisor to Ignite Investments and Commodities Limited.

“This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the ordinary shares or any other securities, nor will there be any sale of the ordinary shares or any other securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted.”

The energy firm had said recently that it plans to sell its upstream services and power businesses in Nigeria and divest from Ghana to focus on its core fuel distribution operation at home.

According to reports, the move comes as a surprise aboutturn for a company whose Chief Executive Akin Akinfemiwa told investors in Lagos last August that he wanted to aggressively pursue M&A opportunities along the energy value chain and acquire marginal oilfields to boost its upstream business.

It said interest costs attributable to the businesses to be sold stood at N2.2 billion as of December.

It now plans to seek shareholder approval for the sale on May 23 and appoint advisers, it said in a notice to investors. Forte Oil did not give a reason for the change in direction but said the downstream sector in Nigeria had gone through changes in recent years and was expected to evolve further

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