Oando gets court approval to release 2019 & 2020 financials, resolves conflict with indirect stakeholder

The long-awaited full-year end 2019 and 2020 financial statements from Oando, one of Nigeria's leading oil companies, were finally made public on Wednesday, June 22.  The Securities and Exchange Commission (SEC) reportedly suspended the company's 2018 Annual General Meeting (AGM) as a result of a disagreement with a minority shareholder, Ansbury Investment Inc., which caused a three-year delay in the Oando's data release.

Following a petition from the indirect stakeholder, the Nigerian SEC ordered a forensic audit into the oil group's shareholding structure in 2018, expressing worries about potential insider trading.

The investigations started when the business, which is listed on two exchanges in Johannesburg, bought ConocoPhillips' Nigerian asset in 2014 to transition from being a gasoline merchant to an oil producer that competes with large corporations like Shell and Exxon Mobil.

Oando executives repeatedly criticized the decision stating that it wasn't in the best interests of the market due to the postponement of the company's 2018 AGM and related concerns, which prohibited shareholders from being informed of business operations.

Oando said on Wednesday that a Nigerian court had ordered it to buy out the its minority shareholders after a number of investors petitioned for the purchase to be made mandatory.

Ocean and Oil Development Partners (OODP), an investment vehicle, owns 57.37 percent of the corporation, with minority shareholders owning the remaining 42.63 percent. Oando has seen a number of shareholder disputes and regulatory inquiries. 

A part of the conflict with Ansbury was resolved when Oando agreed to a resolution with the SEC in July 2021 about all matters legal disputes and other concerns arising. The fact that the SEC did not find Oando culpable of any violation helped to prevent additional market disruptions and loss to Oando PLC's shareholders.

In its 2019 audited financial statements, the business recorded a loss-after-tax of N207.1 billion, which was mostly caused by impairments for goodwill and loans connected to the indirect shareholder dispute following 12 consecutive quarters of profits up until Q3, 2019.

Oando stated in its 2019 audited financial statements, that it realized a $499 million deficit due to borrowings, including a $425 million loan from Afrexim bank to settle with the indirect shareholder, Ansbury Investments.

The company has been consistent in stating that all decisions made thus far have always been in the best interests of all its shareholders. Additionally, shareholders have repeatedly requested that Oando takes all necessary actions to settle this conflict and advance the company.

The stock price substantially declined from its offering price of an average of N9 per share in 2017 to an average of N3 per share in 2022 largely due to the activities of the SEC and the indirect shareholder.

After 2019 was over, the business faced a new difficulty in 2020: the COVID-19 pandemic, which had a detrimental impact on all corporations, not just those in the oil and gas industry. A loss after tax of N132.6 billion, a 36 percent decrease over 2019, was revealed in the company's 2020 Full Year End financials. a spike in the results from the prior year that is positive.