Forte Oil has said it plans to sell its upstream services and power businesses in Nigeria and divest from Ghana to focus on its core fuel distribution operation at home, according to a report by Reuters on Wednesday.

The move comes as a surprise about-turn for a company, whose Chief Executive, Akin Akinfemiwa, told investors in Lagos in August that he wanted to aggressively pursue mergers and acquisition opportunities along the energy value chain, and acquire marginal oilfields to boost its upstream business.

The company, majority owned by billionaire, Femi Otedola, has also been in talks with a major refinery to form a strategic partnership for local refining of petroleum products.

Forte Oil’s share price plunged by 49 per cent last year after the company struggled to get hard currency to import products. It now has a total market value of N57.3bn but gave no indication on Wednesday of how much the businesses for sale might fetch.

It said interest costs attributable to the businesses to be sold stood at N2.2bn as of December. It now plans to seek shareholder approval for the sale on May 23 and appoint advisers, it said in a notice to investors.

Forte Oil did not give a reason for the change in direction but said the downstream sector in Nigeria had gone through changes in recent years and was expected to evolve further.

It added that the industry had operated under a tightly regulated fixed margin but could be deregulated, especially given its impact on the Nigerian currency and import bill.

The government increased petrol prices by 67 per cent to N145 in 2016 to cut subsidies paid for fuel imports after a plunge in oil prices hit state revenues, caused dollar shortages and halted infrastructure projects, with firms laying off tens of thousands of workers.

However, the hike did not prevent fuel shortages, which have plagued Nigeria for much of last year and this year.

Nigeria’s existing and ageing refineries have a daily domestic refining capacity of six million litres, while the daily consumption stands at 35 million litres, so the country has to import the bulk of what it consumes.

Forte Oil has two storage depots, five aviation fuel depots and a lubricant blending plant. It also has 100 trucks for distribution of products across its more than 500 retail outlets, which will require a lot of capital to expand.

Its 57-per cent owned power unit, Amperion Power Distribution Company, has a lot of receivables due from the state-backed off-taker and its upstream unit has contributed less than seven per cent to group earnings over the past three years.

The unit in Ghana has declared losses over the last three years and has uncollectible trade debts due to tough economic conditions and a currency devaluation in the cocoa-rich country.

Forte Oil said proceeds from the divestment would be used to expand its downstream fuel distribution business and to invest in storage infrastructure.

http://investorsking.com/forte-oil-sell-nigerian-assets-exit-ghana/

Ok

Ok

All the best Baba Cuppy!

Ok

Buhari body odour has done it again

Buhari is a terrorist

I wish I could comment. But I don't have anything reasonable to say here because it's talking about business and investment. I hope one day I can boost of being among the top investors in the country, so such news will matter to me.

For Now- this land is not for sale. Beware of Chidi my son!

Sounds terrific to me .. this Baba regime is just killing business..






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Lol

Another casualty of President Buhari's unproductive body language.

come build a Refinery,in that way you can compete with mr. monopoly.

Hmmm. Thoughtful of Forte Oil.

lordcabasa:
Another casualty of President Buhari's unproductive body language.

Na Buhari also cause the tough economy in Ghana abi. Continue o.

People are looking at renewable energy these retards are still chasing these old energy.

Baba cuppy plz don't go nahw. We love u]

History will continue judge all those leaders "past and present" for mortgaging the days of excess in line with oil boom. Meanwhile, some persons still fails to look into the future without oil. Until the worse happens.

Even agriculture is been given lip service. Those that still encourage themselves to farm crops have cattle's to contend with. It is a shame!

IsaAbubakar:
Buhari is a terrorist

Frustrated Shiite?

Nothing good comes out of the name buhari

I'm sure you didn't read the body of the post

lordcabasa:
Another casualty of President Buhari's unproductive body language.

When all ur kids know best to do is just waste/flaunt ur money online... fly men private jet.

Davido is making his own money while cuppy and the 6ters r liquidating their old mans finace

Otedola and dangote arrangement one will refine the other distribute

lordcabasa:
Another casualty of President Buhari's unproductive body language.

These guys are not innovative. Too archaic in their reasoning and they always fail to test fresh waters.

Haha this kind of news for nairaland front page of today? You’ll only get dumb comments. Nairaland’s home to the dogs.
Anyway, how is the stock exchange in Nigeria doing? Do we really have investors trading on this equities?

zeestunner:
Otedola and dangote arrangement one will refine the other distribute

He is probably plaining to build his own

Things are hard these days for everyone.

We know MOMAN to be
MRS, Forte Oil, 11PlC(Mobil) and Oando. Non of them bring in refined products cos they'll be running at a loss.

Major challenge came when all prices fell. Even Mobil Nigeria (MON) was sold partly to NIPCO in 2016.

The hustle is very real

For like buy

mctolspell:
Haha this kind of news for nairaland front page of today? You’ll only get dumb comments. Nairaland’s home to the dogs.
Anyway, how is the stock exchange in Nigeria doing? Do we really have investors trading on this equities?

They only understand BBN and Davido.
Many of them have zero economic sense. Buhari was right afterall

As much as I agree with you, Gazprom and the likes had issues too when the oil price was low. Ask Angola, they still in recession.
Most of this companies are one man owned though they are traded on the stock exchange.. they just enjoy the goodies(corruption in their own way) from any government in power. Not the right way of doing business.

BedLam:
That is what happens when you are not innovative just like most other Nigerian businesses like Dangote and Globalcom. These guys just rake in analogue money with no innovation on their side. After many years, these people can't drill oil. We still use Foreign companies to drill our own oil. Meanwhile China the world's largest importer of oil has one of the biggest Oil companies in the world.

You hear of Gazprom of Russia, Saudi Aramco and you wonder what we are doing in this part of the world.

The future will tell. I'm sure one day, cement won't be tasting this sweet.