By Adewale Sanyaolu

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Oando Plc and a consortium of 11 commercial banks yesterday, signed a medium term loan deal of N94.90 billion to enable the oil and gas firm consolidate on its downstream operations in view of the recent deregulation of the sector.
The deal will see the 11 banks comprising Fidelity Bank Plc, Keystone Bank Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, Zenith Bank Plc, First Bank Nigeria Plc, United Bank for Africa (UBA) Plc, Access Bank Plc, Diamond Bank Plc, Ecobank Nigeria Limited and First City Monument Bank (FCMB) Plc, jointly raising N94.90 billion for Oando under a five-year loan pact.
Oando Plc is an integrated oil and gas company headquartered in Nigeria and the largest energy solutions provider in sub-Saharan Africa with primary and secondary listings on the Nigerian stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE) respectively.
The 11 consortium of banks confirmed that the medium term loan will bring an immediate cash flow injection of $195 million while further repayment is expected to happen within 90 days from the proceeds of $130 million from the sale of Oando Gas and Power.
“This sale is to allow Oando strictly focus on its downstream activities in light of the recent deregulation. The company also expects to raise an additional $800 million to N1 billion within the next 18 to 24 months as it de-leverages on its Oando Energy Resources (OER).”
Speaking on behalf of the participating banks, the Group Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Herbert Wigwe, said the medium term loan facility would allow Oando to optimise its balance sheet towards greater efficiency.
“As we all know, Oando is the largest indigenous oil and gas player in sub-Saharan Africa and this medium term loan facility would allow it to optimise its balance sheet towards greater efficiency and improve its working capital. This combined with the synergy of investment by HVI into its downstream operations, will see Oando’s growth and development really take off,” Wigwe said.
Speaking on the expectations from the deal, the Group Chief Executive of Oando Plc, Mr. Wale Tinubu, said the N90.90 billion loan pact will  allow the group to have more cash flow, adding that Oando is not pressed to make principal payments.
“It is a three-year moratorium on principal so it means more earnings for Oando and it means more profit for the shareholders. It equally means a better quality of service for our customers because at the end of the day, we are a working capital intensive company.”
Tinubu, however, commended the consortium of banks for providing the facility to the company, noting that it would have significant development impact on Oando’s group operations.