Yesterday, a regulatory filing at the Nigerian Stock Exchange (NSE) indicated that Oando Plc has reached a $115.8 million agreement with a premier Africa-focused private investment firm, Helios Investment Partners LLP. With this agreement, Helios will be purchasing a 49 percent stake in Oando’s midstream subsidiary, Oando Gas and Power (OGP). Africa Oil and Gas Report said there were three bidders for the assets.

“The strategic alliance will firmly leverage on the group’s local knowledge and expertise and Helios’ strong financial capabilities to build a more formidable company that will exceed existing performance,” Mr Wale Tinubu, the Group Chief Executive Officer, Oando Plc. told the Nations newspaper.

However, the transaction is subject to the receipt of regulatory approvals and customary purchase price adjustments. By the time the deal is completed Oando will be left with 49 percent equity stake and voting rights in OGP while an undisclosed Nigerian firm will hold the remaining two percent stake.

This deal will help Oando bring down its debt. As at the end of June, the group had borrowings of 279.7-billion naira ($888.6m) against 138.2-billion naira of total equity.

OGP has over 260km of gas infrastructure in Nigeria and delivers at peak 70-million standard cubic feet of gas a day to more than 175 industrial and commercial customers. It is regarded as the pioneer developer of Nigeria’s natural gas distribution network and has subsequently grown to become the largest private sector gas distributor in the country.

It will be recalled that in July, a consortium of new core investors, HV Investments II BV (HVI), injected $210 million into the downstream operations of Oando for 49 percent stake. Oando retains 49 percent, with 2 percent held by a local entity. The funding injection has also helped Oando to pay down debt. This was part of the highlights of the partial divestment of equity stake in the energy group’s downstream operations to HVI. It is worthy of note that HVI is a joint venture owned by Helios Investment Partners (Helios) and the Vitol Group (Vitol).

Under this divestment and recapitalization deal, a new company will be formed to hold interests in Oando Marketing Limited, Oando Supply and Trading Limited, Apapa SPM Limited, and Oando Trippmart Limited.