Nigeria's top fuel retailer and gas distributor Oando Plc plans to raise 200 billion naira ($1.3 billion) through debt and equity over the next two years to expand its business, a senior executive said on Monday.
Oando has been investing in oil exploration and production over the last few years to try and diversify its low-margin fuel retail business and take advantage of plans to deregulate the sector.
Chief Finance Officer Femi Adeyemo told Reuters that Oando, which is also listed on the Johannesburg bourse, has received shareholders approval to raise the new cash and is waiting for regulatory approval.
We are working on a total package, the debt will be a shelf registration programme, while the equity option will be raised either locally or internationally, Adeyemo said, adding that details of the plan will be disclosed later this week.
Oando plans to invest the cash raised from the sale of new shares and bond issue to expand its upstream business, make more acquisitions and restructure its short-term bank loans to longer-term, company sources said.
Oando Chief Executive Wale Tinubu had told Reuters in January the company, which sells or distributes one in five litres of petroleum products in Africa's most populous nation, planned to produce 100,000 barrels per day of crude oil by 2013.
The company was also targeting 300 million barrels of proven and probable reserves over the same period.
Oando bought a 15 percent stake in two deep-water oil blocks for $197 million from Italian firm Eni in January and said it was looking to acquire more assets which were near production or already producing.
The company signed a $150 million two-year drilling contract with Agip in May and acquired two inland barge rigs from Anglo Dutch energy firm Shell at an estimated $43.5 million.
Oando is also a key player in gas infrastructure in Africa's biggest oil and gas industry, operating a 200 km distribution pipeline in the commercial capital Lagos and southeastern Nigeria.
($1 = 149.75 naira)
(Writing by Tume Ahemba; Editing by Rupert Winchester)