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| Tinubu, Oando ceo |
Oando has been hard hit by the fall in oil prices since mid-2014, just as it paid $1.5 billion to acquire the Nigerian unit of the U.S. firm ConocoPhillips' , part of which it funded through debt.
In addition to the rights issue of up to 80 billion naira, the company will also seek approval on Dec. 7 to issue 40 billion naira of shares from its unissued share capital to swap debt for equity under agreements it has with two shareholders, Ocean and Oil Development Partners and QPR Limited, it said.
The company, which is listed in Johannesburg and Toronto as well as in Lagos, is also seeking shareholder approval to sell its gas and power investments.
Last week the energy firm repaid a $100 million loan owed to African Export-Import Bank, part of which was taken to fund the Conoco acquisition. It reported net debt of $1.77 billion as of the nine months to September, down from $2.41 billion in 2014.
Oando agreed in June to sell 60 percent stake in its downstream business to Vitol and Soros-backed Helios Investment Partners for $276 million.
Shares in the oil company are down 52 percent so far this year after falling 34 percent last year, giving it a market value of 92.63 billion naira ($466 million). The company shed 0.13 percent to 7.70 naira at 1200 GMT.
The energy company last week posted a $246 million loss in the nine months to September after reporting a record loss of $1.10 billion for the full year 2014.
The stock exchange said last week it was "greatly concerned" about the losses at Oando and was reviewing the situation.
The Conoco acquisition was aimed at helping Oando change from being a marketer of refined petroleum products into an oil and gas explorer. But high financing costs coupled with the plunge in oil prices have hit profits, despite an increase in production volumes, analysts say.
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