Oando Plc has announced the distribution of 1.28 billion additional shares to its shareholders in the form of a stock dividend. This move follows shareholder approval at the company’s 45th Annual General Meeting (AGM).
The decision allows “the Company may cause shares received pursuant to sub-resolution (b) above, and/or their cash equivalent to be distributed to shareholders of record at date(s) as may be determined by the Board of Directors, from time to time, on a pro-rata basis.”
The distribution will occur in two tranches, with the first tranche of 641,856,301 ordinary shares set for allocation at the close of business on February 14, 2025. The second tranche, comprising 641,856,300 ordinary shares, will be distributed at the close of business on June 30, 2025. The shares, valued at ₦97,562,157,676 based on Oando’s closing share price of ₦76 as of January 30, 2025, will be allocated without dilution.
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Impact on shareholders
This stock dividend directly increases minority shareholders’ ownership stakes. Shareholders will receive one (1) new ordinary share of 50 kobo each for every twelve (12) existing ordinary shares of 50 kobo held. The stock dividend provides shareholders with flexibility, allowing them to retain their shares or convert them into cash at their discretion. Unlike cash dividends, which offer a fixed payout, stock dividends provide potential for future value appreciation.
Oando’s decision to issue stock dividends rather than cash dividends ensures the company maintains a strong financial position. By preserving capital, Oando aims to sustain long-term growth and create additional value for shareholders. The issuance of additional shares also increases the potential for higher future dividend payouts, as shareholders holding more shares will be entitled to larger distributions in subsequent dividend payments.
Financial performance and growth strategy
Oando recorded significant financial growth in 2024, driven by its $783 million acquisition of Nigerian Agip Oil Company (NAOC) in August 2024. The acquisition led to a bullish increase of over 500% in Oando’s share price and contributed to a 45% revenue surge to ₦4.1 trillion in the company’s FY 2024 financial results. This strong performance positions Oando as a leading player in Nigeria’s energy sector.
In January 2025, Oando announced the award of Block KON 13 in Angola’s Onshore Kwanza Basin. This expansion aligns with the company’s strategic objectives to grow its upstream operations and strengthen its regional footprint.
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Group Chief Executive (GCE) Wale Tinubu CON outlined Oando’s focus for 2025, stating that the company will prioritise cost optimisation, operational efficiency, streamlining processes, enhancing procurement, and leveraging technology to improve productivity across its operations.
Strategic share distribution to maintain market stability
By distributing the shares in two phases, Oando aims to maintain share price stability and prevent market fluctuations. The staggered distribution ensures a steady increase in shareholder value without sudden market movements that could impact the company’s stock performance.
This announcement reinforces Oando’s commitment to delivering long-term value to its shareholders while maintaining financial strength. The stock dividend issuance, coupled with the company’s recent acquisitions and strategic expansion, underscores Oando’s focus on sustained growth and market leadership.
