The management of Forte Oil Plc on Friday said it was perfecting arrangements to raise the sum of N20 billion from the equity market to support operation and drive diversification strategy.
Julius Omodayo-Owotuga, Forte Oil Group Executive Director, Finance and Risk Management, said this at a news conference in Lagos.
Omodayo-Owotuga said that the proceeds realised from the fund raising exercise would be used for business expansion, enhancement of working capital and downstream businesses, among others.
He said that the company had already approached the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) for the equity raising exercise.
Omodayo-Owotuga said that the company had the mandate of the shareholders to raise N100 billion fresh capitals.
He stated that the company had already raised nine billion naira through debt capital in 2016, noting that, the capital raising would be in tranches as the need arises.
Omodayo-Owotuga added that the company had also identified five growth pillars aimed at driving revenues and enhanced value creation to all its stakeholders.
According to him, the company will focus on high margin businesses such as lubricants, Liquefied Petroleum Gas (LPG) and power to drive revenue generation.
He said that the company grew its lubricants business by 62 per cent in 2016, to 21 million litres from 13 million litres posted in 2015.
Omodayo-Owotuga added that a total of 90 million dollars was used for re-branding of the companies LPG facilities at Apapa, Abuja and Kano.
He said that the company would also strengthen its balance sheet through enhancement of working capital and efficient management of inventory and trade account receivables. The executive director said that the company was looking at the right offshore asset to acquire at the right price to increase market share.
He said that the company would optimise distribution channels as well as partner with telecommunication firms and financial institutions for effective distribution of its services. Omodayo-Owotuga stated that Forte Oil would focus on mergers and acquisitions within the industry to increase its downstream business.
He noted that downstream business contributed 89.9 per cent of the company’s revenue in 2016; power nine per cent, while upstream contributed 1.5 per cent. Omodayo-Owotuga further said that downstream contributed 75 per cent in gross profit, power, 29 per cent and upstream, five per cent in 2016.