Rainoil, through its investment arm – Preline Limited, has emerged as the new majority shareholder at Eterna Oil, as current shareholders with significant interests sold their equity stakes to the new shareholder.
The sales took place through several cross trades, totalling 794,969,774 units of the company’s ordinary shares through cross-trades at N13.50 per share, a 56.07% premium to the market price of N8.65 per share.
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Preline Limited will now make a Tender Offer to the minority shareholders, in line with the provisions of the Securities and Exchange Commission (SEC) Rules and the NGX Rules.
Consequently, the stock, which rallied 8.13% on Friday, October 29, being the day of the cross trades, may see steady appreciation towards N13.50, being the price at which Preline Limited may have to present a Tender Offer to minority shareholders.
The seven sellers of the shares being Lenux Integrated Resources Limited, Global Energy & Raw Materials Limited, Meristem Wealth Management Limited, Radix Capital Partners Limited, GASL Nominee Limited, GTI Capital Limited, and Cardinalstone Partners Limited, had previously executed an agreement with Preline Limited, and the transaction has been duly approved by SEC, the capital market regulator.
Interestingly, while the cross trades were ongoing, Eterna Oil released its 2021 Q3 results, showing a strong 114.9% growth in profit after tax to N415.99 million for the nine months ending September 2021. The revenue grew strongly by 35.93% to N61.37billion for the period.
Though the profitability of the company was relatively weak in Q3 standalone (July to September) as Eterna recorded a 56% year-on-year decline in profit within the period, mainly due to foreign exchange losses and a spike in some foreign currency-denominated administrative expenses.
However, the company seems to be gaining momentum on sales of its products, with improved efficiencies on its core operations.
