Business

Forte Oil rallies N8.53b gains on Otedola’s divestment deal

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Shareholders of Forte Oil Plc have earned about N8.53 billion in capital gains after the Nigerian Stock Exchange (NSE) gave approval to a N64.9 billion divestment deal by the oil and gas group’s major shareholder and Chairman, Mr. Femi Otedola.

The Nation had last week reported that authorities at the NSE had approved the full divestment of the majority equity stake held by Otedola in Forte Oil Plc in a transaction worth N64.89 billion. Otedola holds 982.97 million ordinary shares of 50 kobo each in Forte Oil through direct and indirect shareholdings, representing 75 per cent majority equity stake in the indigenous oil and gas group.

The Nation’s check yesterday indicated that Forte Oil’s share price has risen by 24.44 per cent from its last week’s opening value of N25.75 per share to open yesterday at N32.30 per share, representing net capital gains of N8.53 billion.

Forte Oil was the highest gainer at the equities market in the previous week, a feat it repeated in the opening trading session on Monday.

Market analysts said investors were revaluing the oil and gas company after the divestment deal valued it at N66.01 per share. The transaction price of N66.01 per cent still represents about 104.4 per cent premium on the opening share price at the NSE yesterday.

A document obtained by The Nation had indicated that the Exchange had approved application for the block divestment of the 75 per cent majority equity stake held by Otedola in favour of Ignite Investments and Commodities Limited at a price of N66.01 per share.

Otedola had last December announced that he planned to sell his 75 per cent majority equity stake in Forte Oil to Prudent Energy, which will be investing through Ignite Investments and Commodities Limited.

The December 2018 announcement came after shareholders had in May 2018 approved a restructuring plan pushed by Otedola-led board of directors aimed at restructuring the group’s operations by divesting from its upstream services and power generating businesses and the sale of its downstream business in Ghana.

The Nation

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