Dual listing raises $500 mn for oil producer
Oil company Seplat Petroleum has become the first Nigerian firm to list on both the London Stock Exchange and the Nigerian Stock Exchange, raising $500 mn in an IPO.
The dual listing is intended to allow the company to tap international finances while bringing benefits to Nigerian investors, says Bryant Orjiako, Seplat’s chairman. The money raised will be used both to pay off existing debt and make further acquisitions.
‘A London listing ensures Nigerian companies have access to the world’s largest pool of international equity capital and to the world’s marquee investors, while a Nigerian listing ensures all available domestic funds are tapped and Nigerian citizens are given the opportunity to participate in the wealth created by the development of the country’s natural resources,’ Orjiako says in a press release.
The offering gives the entire company, which reported 2013 revenues of $880 mn and an operating profit of $479 mn, a market capitalization of about $1.9 bn. Seplat says it will continue a program of expansion in Nigeria. Since 2010 the company has bought interests in three Nigerian oil leases from Shell and a 40 percent stake in an oil field in the Niger Delta.
‘Our target is to grow gross operated production of oil and condensate to 85,000 barrels per day by the end of 2016, with at least 100 percent annual reserves replacement from our existing assets,’ Orjiako says. ‘We also plan to use our strategically located gas infrastructure to rapidly commercialize our gas reserves, as the Nigerian gas market develops.’
Paris-based MPI Energy, a founding investor that saw its stake in Seplat diluted to 22 percent from 30 percent by the IPO, says in a press release that the terms of the IPO required Seplat to pay off a $48 mn shareholder loan. As a result, MPI had to give up its veto right over major Seplat decisions; it will now have the right only to name one director to the board.