CEO, Oando Plc, Mr. Wale Tinubu
The Group Chief Executive Officer of Oando Plc, Mr. Wale Tinubu, has assured investors of high dividend payout as the rights issue to raise N54.6 billion closes tomorrow.
Speaking yesterday at the Facts-Behind-the-Figures presentation to the management of the Nigerian Stock Exchange (NSE), stockbrokers and financial journalists in Lagos yesterday, Tinubu said the company’s cash flow would improve going forward and would lead to higher dividend payout.
According to him, Oando had a strategy in place to enhance value for shareholders through a balance sheet optimism that would lead to a reduction in debt and improvement in earnings.
He explained that shareholders did not receive dividends for 2011 due to decision to terminate a management service agreement with Ocean and Oil, saying that the cash used to service that agreement would be retained in the company for shareholders’ benefit.
“By not paying a dividend, we were punished, which affected our share price. Going forward, our forecast sees us paying 50 per cent of our earnings as dividends. It is therefore a wise thing for investors to take advantage of the our share price which is grossly undervalued. Our downstream assets would begin to yield significant earnings and this will impact our performance going forward,” Tinubu said.
He said the proceeds from the rights issue would assist the company to executive its growth strategy.
The Securities and Exchange Commission (SEC) had to approve the extension of the rights issue due to the industrial action by pensioners of the Nigerian Postal Services (NIPOST) last month, which resulted in the disruption of distribution of rights circulars to majority of Oando’s shareholders.
Shareholders hailed the extension with the President, Association for the Advancement of the Rights of Nigerian Shareholders (AARNS), Dr. Farouk Umar, saying it showed that the regulators, board and management of Oando had the interest of shareholders at heart.
Meanwhile, the NSE All-Share Index declined by 0.02 per cent to be at 33,251.50, indicating that the bulls were gradually returning to the market.