Billionaire businessman, Mr. Femi Otedola, has fully divested from Forte Oil Plc.
The petroleum marketing firm had last December announced plans by Otedola, who has been the chairman of the company, to divest its stake to Prudent Energy team, which uses Ignite Investments and Commodities Limited, as vehicle.
Forte Oil had said Otedola's divestment from the downstream business was pursuant to his decision to explore and maximise business opportunities in refining and petrochemicals, noting that the transaction was expected to close in the first quarter of 2019 subject to the satisfaction of various conditions and receipt of applicable regulatory approvals.
However, on the floor of the Nigerian Stock Exchange (NSE), WEDNESday, 973.252 million divested shares of the company were crossed for about N64 billion.
In other words, the divested shares were traded on the floor of the NSE yesterday.
After the divested shares were traded, Otedola posted in his verified Instagram page, that he had divested from the business and would now concentrate on his power generation business.
"In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc," he said.
He explained that from a moribund business, his team successfully built the company into one of the most profitable in the downstream petroleum marketing sub-sector.
"A few years ago," he wrote, "my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum) into Forte Oil Plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders."
"We wish our successors the very best and urge them to build on our legacies, which have been established since 1964," he added.
Formerly known as African Petroleum Plc, Forte Oil operates mostly in the downstream sector of the oil and gas industry.
Prior to Otedola's planned divestment, Forte Oil had gotten shareholders' endorsement to restructure the company via a divestment of its upstream services business - Forte Upstream Services Limited, its power generating business, Amperion Power Distribution Company Limited, and its downstream business in Ghana, AP Oil and Gas Ghana Limited.
Forte Oil had explained that its decision to focus on downstream operations would boost distributable earnings for the benefit of shareholders.
According to the company, its operations is in the downstream oil and gas segment, and the group has established itself as a foremost indigenous petroleum marketing company with a rich history and strong operational platforms.
It explained that although power business is profitable, it has huge receivables and a significant portion of its distributed earnings is also utilised in servicing the acquisition debt finance.
Regarding the upstream services business, Forte Oil said despite the significant resources deployed, including management time, the upstream services business has consistently contributed less than seven per cent to the group's earnings in the last three financial years.
Similarly, the company said the downstream subsidiary in Ghana has consistently declared losses after tax in the last three years and has substantial bad and uncollectable trade debts in the business as a result of negative economic conditions and currency devaluation in prior years.
"The proceeds of the divestment initiative will also enable your company to compete more favourably and achieve the planned expansion of the business for increased market share. The group foresees immense prospects in the downstream oil and gas sector, and is positioning proactively to harness these opportunities," Forte Oil had said.