Business mogul Femi Otedola has announced divestment of his 75 per cent shareholding in Forte Oil to maximize opportunities in refining and petrochemicals businesses.
Otedola and Aliko Dangote are in partnership for the construction of the $12 billion 650,000 barrels per day petrochemical refinery in Lekki, Lagos. The project is expected to come on-stream next year.
Forte Oil, in a statement, said Otedola’s decision to divest from the downstream business is pursuant to his decision to explore and maximise business opportunities in refining and petrochemicals.
Signed by Akinleye Olagbende, Forte Oil’s general counsel the statement read: “Forte Oil Plc hereby notifies the Nigerian Stock Exchange, Securities and Exchange Commission, shareholders and the investing community that its majority shareholder, Mr Femi Otedola, has reached an agreement with the Prudent Energy team, investing through Ignite Investments and Commodities Limited, to divest of his full 75 per cent direct and indirect shareholding in the company’s downstream business.
“The transaction is expected to close in the first quarter of 2019 subject to the satisfaction of various conditions and receipt of applicable regulatory approval.”
Standard Chartered Bank, Corporate Finance & Advisory, Dubai, and Olaniwun Ajayi LP served as financial and legal advisors to Otedola, while PricewaterhouseCoopers and Stanbic IBTC Capital Limited served as joint financial advisors and Sefton Fross served as legal advisor to Ignite Investments and Commodities Limited.
“There will be no sale of the ordinary shares or any other securities in any state or jurisdiction in which such an offer solicitation or sale is not permitted,” the notification read.
The Federal Government is relying on Dangote refinery to help reduce petroleum products importation. The refinery was earlier proposed to begin operation this month but shifted to next year.
Known as African Petroleum, in the year 2000, the Federal Government under the privatisation programme divested its 40 per cent to core investors and interested Nigerians.
In May 2007, the shareholding structure took another dimension as Incorporated Trustees of NNPC’s Pension Fund divested its stake to Zenon Petroleum & Gas Limited owned by Femi Otedola, making it the majority shareholder in the company. As a result, Zenon Petroleum & Gas Limited and its affiliated entities became the core investor in the company.
Under the new management, African Petroleum embarked on a rebranding and restructuring drive which led to a name change to Forte Oil Plc in December, 2010.