Investors' high demand for N54.6 billion rights issue by Oando Plc has led to an oversubscription of the offer, indications emerged last Friday.
The integrated energy firm had issued 4.548 billion shares to existing shareholders at N12 per share to raise N54.6 billion. The offer opened December 28 and closed last Wednesday.
However, sources close to the issuing houses and registrars said the returns so far collated showed that shareholders requested for more shares, a development that will lead to an oversubscription.
"There was last a minute rush for the shares few days to the closure of the offer last week following the attractive price and the confidence investors expressed in the business fundamental and the future outlook of the leading integrated energy company," the source said.
Oando has made huge investments over the years that would begin to yield fruits very soon and analysts believed that the prospect of having a stake in the very lucrative crude oil production might have increased investors' appetite for Oando rights issue offer.
When Oando made a similar rights issue in 2010, it was oversubscribed by 28 per cent and the market experts had expressed optimism that this latest capital raising exercise would equally enjoy high patronage. Analysts had already predicted immediate capital gains as they said the offer was made at discount, considering the future prospects in the leading energy firm that is well diversified across all sectors of the oil and gas industry.
For instance, analysts at Meristem Securities Limited said the equity would assume a bullish run to reach N22.14 within the year. In the same vein, analysts at FSDH Securities Limited have projected a price of N19.12 for Oando shares.
The Group Chief Executive of Oando, Mr. Wale Tinubu, last week assured shareholders of a constant dividends payment going forward, saying that the company had put a strategy in place to enhance value for shareholders through a balance sheet optimisation that would lead to a reduction in debt and improvement in earnings.