₦airaland Forum

Olaide1295:
Bought at 70.5 yesterday, I’ll be buying more, wish I could sell off my Tbills and hold WAPCO instead.
Wapco has about 50-60% potential upside (assuming 100 naira sale price at end of 2025) while fixed income is less than 30%.

but carries a bit of more risk than most fixed income (i am assuming sovereign). hence the reason for difference risk premium on both asset

KarlTom:
Dey play.
People are still chasing FMN at <5% profit...

The 104 or 146 is not official figure so we cannot predict.
I expect JIJOists to enjoy this one from next week...

ohhhhh i tot the 104 is fixed

Sunrisepebble:
There’s a fixed price of 104 already. The price is 70.15 now, representing at least a 48% upside, why will investors not continue rushing it until the premium percentage is non existent. I made sure to say at least because me I’m staying put in case one shareholder who gets mind wants to drag it higher than the fixed price

you can expect investor to stop chasing it when the differential between the market price and the fixed price is between 20-25% (around fixed deposit / TBILL rate)

emmanuelewumi:
Next week go loud for Lafarge, should get to N80 before Christmas

80 sir? I am positive that is understatement. If the hint that sunrise gave comes to past. I believe 120 should be more fair. The acquirer paid equivalent of 130 something for a similar coy in a market that is not as big as Nigeria and a company that is not debt free as Wapco.

pluto09:
I just remember the oando reverse takeover of one exile company around 2011 during the good day of SMN.
Na so we almost scattered our brain trying to understand those cowboys then.
This was one of the issues that made me respect sir wanajo so much.
Those who are interested in the story might check this link.
https://www.oandoplc.com/press-release/frequently-asked-questions-on-oando-plc-and-exile-resources-inc

Na that one carry Wale go Canada stock exchange that time b4 he run away from dir head off to joburg

He don teyyyyy

BabsO2:
Please share the grievance at the AGM politely. All for the better.

Which grievance am i sharing at the AGM. A management/board full of ivy league trained lawyers/accountants/ management experts does not know basic/rudimentary corporate governance practice. That would be an insult on their education.


Abeggiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii. Nextttttttttttttttttttttttttttttttttttttttttttt

HesInMe:
Oando shareholder here. There is nothing positive about this.

Unless accounting has changed under Professor Wale, accounts receivables (AR) are sales that Oando made to customers and booked as revenue but hasn't collected cash. And there's a (bad) reason why not. It is not good when your customers have problems raising cash to pay you, "asset-rich" or not. And if you want to liquidate those ARs, which fool will stand ready to pay you face value for the privilege of being owed by those "asset-rich" debtors?

And please stop the special-dividend delusion. First, that AR has already been booked as revenue; it is not some new income. Second, a company as indebted as Oando is cannot be paying dividends. At minimum, that would probably violate their debt covenants. Creditors want their money first before you pay shareholders.

So why this weird proposal? I suspect, but do not know for sure, that it's got to do with concerns about recovery of the AR and the arcane, I-am-too-sharp-for-myself deals that Wale & Co have been doing behind the scenes. Instead of writing down the AR, which would negatively hit revenues, they're trying to shuffle the deck. Unless I'm missing something, that can't be good for minority shareholders. Perhaps I should've sold at N90.

Another good perspective. and i cant help laugh at the " I-am-too-sharp-for-myself deals that Wale & Co have been doing behind the scenes"

Summary of your perspective (for the benefit of non accountant) if true is that Ojt want to substitute bad debt on its book with dead coy shares in our pocket instead of taking a provision / write down of the bad debt which would have negative impact the P&L


hmmmm it is well

megawealth01:
Wale sabi corporate governance practice?

we dey think say hin don repent. But a leopard ...............................

lolllllllllllllllllllllllllllllll

yMcy56:
Alright sir.
I believed the shareholders to attend the meeting aren't dumb anyway.
They'll seek for clarification as well.

They are not dumb but a gun is being put to their head how much of intellect can be use in such a case

I opened my statement with lets call a spade a spade for a reason


n.b no matter how it goes i stand to make substantial gain by virtue of positioning but that doesnt mean we should not speak the truth. This is not a good corporate governance practice

yMcy56:
On this OANDO matter,
I hope we can all read what the AGM agenda says?? because all these Nsempa twists, I'm not understanding......
**Says those who owe the subsidiaries and would be resolved to pay back with share allotment.....
**Then this will be distributed to shareholders..... minority shareholders probably, as form of some bonus shares possibly.

So, what's all these over analysis and big grammar twists all about?
Una don start again o.
If you don't understand, wait till AGM date for clarification, make una no come confuse person with paralysis here. 😁

Mcy let call a spade a spade. There is no paralysis. it is Oando in its usual characteristics and antecedent that is muddling up the water. Good Corporate Governance dictate that more information (than this) should be made available for a key decision that require voting. its like blindfolding person to a voting center meanwhile the ballot paper had been designed such that the choice the organiser want is covering 99% of the ballot paper, what is the probability that the blind folded person would thumb print the remaining 1% space. In addition making any further information available on the AGM date is like putting a gun on the head of the voters. if Oando really want its shareholders to make informed decision then ALL NECESSARY information should be made known on the same date that the AGM meeting is being called (i.e. at least 2 weeks prior to the meeting).

The Management/Board of Oando know this, they are just not doing the right thing, which points to the fact that nothing much has changed.

Selah

BabsO2:
Maybe not mago mago but giving something back to long suffering shareholders. As he cannot deliver dividends right now he wants to share some other goodies perhaps

There is nothing being gave back. The companies are already owned by Oando Plc, so which debt is supposedly being settled (with shares) between two companies owned by same shareholders??

Except he is unbundling (like Afriprud and UCAP a la UBA) which is a business that goes beyond AGM

Abeggiiiiiiiiii nextttttttttttttttttttttttt

Omooloriredade:
It is impossicant. It won't happen. NNPC will never cede shares to Oando or settle debt owed (if any) to Oando in shares.

Also, NNPC can not be classified as a related entity so NNPC is out of the equation in my opinion.

The pool of likely related entities is quite a large one. It's too much work to list them here but if you comb through the annual report you will see the possible culprits there. Debt owed is about N215B.

Disclaimer - I have been wrong many times before but this is my own understanding. Please note that the flag I'm raising here is white, not red nor green. Money can still be made and lost. It is the market afterall.

But Oando own all these related parties either directly or indirectly. In most (if not all) the companies Oando own 100% so what debt is being settled with shares? are these so called debt not suppose to be intercompany which is in and out and of no effect upon consolidation

Ojt don come with mago mago again

Omooloriredade:
Sorry to say, it is highly unlikely.

NNPC a state-owned corporation will settle debts to a private company by alloting shares in the corporation owned by Nigerians? Oando and Tinubu would be looking for trouble be that.

Disclaimer - Chai! For me, hard to reason am that way but anyway make we dey watch.

I totally agree with you on this. i dont see the practicality. This is leg deep in national politics and i doubt if it can be pulled through

Omooloriredade:
No be attack o. Just an opinion which has no bearing on how the market will react to the news. So here goes:

What is huge? Make we know first. The information in that annoucement is slightly insufficient to make a sound investment judgement. There's not enough meat on the bone.

Resolution 3 Summary:

* Related entities owe Oando subsidiaries in the course of doing business together.
* A special resolution is being proposed to have the debt owed transferred to Oando the parent company.
* Debt due date will be brought forward and renegotiated (with or without modifications).
* Further to above, Oando is proposing to have the debt settled by accepting shares in the debtor entities (i.e Debt for equity swap deal).
* The debt for equity swap is intended to help reduce the overall Trade receivables (not payables o) at the group level.
* Shares allocated from the debt to equity conversion is then distributed to existing shareholders of Oando on a pro rata-basis.

Questions:

1. Who are the related entities owing Oando subsidiaries?
2. What is the status of the financial health of these entities?
3. Why are they unable to settle their debt as and when due?
4. Trade receivables are revenue owed to a company from the sale of goods and services. Is buying shares in these onigbese companies the best use of company resources?
5. Can Oando reveal the related entities and if possible provide a brief summary of their financials so shareholders can make informed decisions before voting on these resolutions?
6. Would it be better to instigate an asset sale by these entities and the proceeds used to settle Oando loans or Trade payables?
7. Do these related entities pay dividend?
8. If not, are they listed on the NASD or NGX to provide an exit platform for shareholders should they decide to leave? Or at least convert their own portion of the shares to cash. Don't give me something I can't monetise.
9. Oando has quite a number of subsidiaries and related entities. Which ones are we talking about here?
10. Bonus question - Is there a subsidiary or related entity Wale and Boyo are not shareholders of? Hmm, Wale why are you not paying up for for good and services rendered?

Positive:

1. If the related entities are Asset rich but just suffering a temporary cash crunch.
2. Deal is done at favourable valuation for Oando shareholders i.e entity shares are not overpriced at conversion.
3. OODP (Wale and Boyo) will not be voting. Outcome lies solely in the hands of minority holders (same as the delisting in case anyone didn't know that).
4. Huge positive - converting trade receivables to shares in an asset rich company and transferring same to existing shareholders could be the company rewarding existing shareholders. Basically, the company is proposing to pay out a portion of its income to shareholders. A dividend of some sort. In a way, Question #4 could be a blessing even though Oando still needs to address its huge debt too.
5. Qualification date for this distribution is the date the resolution is passed. Note this one. 17/12.
6. The directors might be seeing light at the end of the tunnel, hence their decision to go this route. Otherwise, it shouldn't be the near-term course of action. Settle your own gbese first before thinking of rewarding shareholders (that is if it's a reward o. It might well be a curse especially if it could have been better spent for the overall good of the company and to reap the reward latter).

Disclaimer - My 2 kobo. My post could be grossly misleading so please DYOR. Not a recommendation to buy or sell Oando.

Oando go turn so many people into Professor last last. See detailed analysis. Well Done

Sunrisepebble:
https://www.globalcement.com/news/item/13460-huaxin-cement-completes-acquisition-of-plants-in-zambia-and-malawi-from-holcim

if the news of buyout/delist flies below are my night school analysis of what a fair price should look like


Lafarge (Wapco) back of envelope possible buy out price (going by link shared by sunrise)

Hoacin bought Lafarge Zambia with a capacity of 1.5m/t for $150m for 70%

Meaning 100% of Lafarge Zambia is priced at $200m for 1.5m/t which equals $133m for 1m/t capacity

Hoacin bought Lafarge Malawi with a capacity of 0.25m/t for $10m for 100% which equals $40m for 1m/t

Above means Hoacin paid an upper of $133m for 1m/t capacity and a lower of $40m for 1m/t with an average of $89m for 1m/t

From above for a Lafarge Nigeria with a capacity of 10.5m/t the

Upper buy could be 10.5 by $133m equals $1.4bn @ 1600/$ gives N2.24 trillion with outstanding shares of 16.11bn gives a valuation of N139 per share

The average buy could be 10.5 by $89m equals $935m @ 1600/$ gives N1.5 trillion bn with outstanding shares of 16.11bn gives a valuation of N93 per share

Lower buy could be 10.5 by $40m equals $420m @ 1600/$ gives N672 million with outstanding shares of 16.11bn gives a valuation of N42 per share

So we have three possible scenario of N42; N93 and N139

42 is already affirmatively broken, so maybe we could test 92 next (if no info comes out before it gets there)

Selah


i have some few units of Wapco so i might be blinded by sentiment

Sunrisepebble:
The details are still not clear to me, just relating what my source said. I think it’s the former though

Ok. Thank you.

Sunrisepebble:
I’m hearing Wapco will be acquired by a Chinese company

*NFA/ DYOR

Nigeria operation (Lafarge Africa) or Global operation (Lafarge Holcim)?

Xidget:
#Observation

Most FA investors advised people to sell banks stocks 2months ago when price was low because of dilution from recapitalisation. And buy back at Q1 2025 when it will become cheaper.

Same people are encouraging people to buy now that price is high. Now, I am wondering, does the dilution not matter anymore?

Sense no go kill uuuuuu. lollllllllllll

yMcy56:
Better make you no start the vawulence.......lol. 😁

There seems to be some kind of coded accumulations while the stock is still on "quiet" mode for now.......

Meanwhile, more heavy cross deals continues in JAPAUL......
Someone will not see all these heavy cross deals now, when the stock starts moving, they'll be quick to tag it MH.....

u sure say no be binocular you dey use?? ?? ?? ??

megawealth01:
Wale seems to be doing his thing quietly but make I no talk wetin I observe before here go turn VAWULENCE by both pretenders and contenders

hmmmmmm. u dey see am abi?? ?? ?? ??

ololufemi:
I even thought it was one former Oga in KPMG that was buying the stocks to merge "Tantalizers" with "The Place". I no even know say na some other Ogbologbo finance guys dey do the deals codedly.

One thing I have learnt in this global spectrum is that if Nokia was once a company that owned a paper mill, then Rokana making toothbrush can become an Oil and Gas conglomerate tomorrow. 🤔

Deep

ololufemi:
My Sunrisepebble brother, when the sun rises to midday, all shadows of doubt cast on WAPCO PLC will disappear stealthy with alacrity. 😎

Funny thing is that the stock dey play twinning with Zenith PLC. Make we see what's up with the two.

Perceptive

ositadima1:
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Appreciated. Noted.

ositadima1:
Market Wizards series .

Hello Chief, Please do you have soft copy of attached which you can oblige?

Agbalowomeri:
Wait for the next suspension

lollllllllllllllllllllllllllllllllllllll

wicked man

mikeapollo:
Oando already took some loans in 2024. Their ability to manage and pull through 2024 is even a surprise to many. But the interest finance costs is becoming a huge drain on the profits.

The debt raise (bond) is to pay down on some of the expensive loans procured earlier in the year to close the ENI deal (check the notes to AFS 2023)

yMcy56:
All offers at days low mopped up
You can sell if you think your BP is rising nah.
OANDO is coming for fund raising, we don't know at what price yet but there may be pumping when the time is coming near......
Not any form of certainty that there'll be pumping but highly likely once the price is determined....
Again, not still sure of the means of fund raising, may be in form of Bond or equity.

the 2023 AFS stated that they intend to wrap up bond in Q4 2024 ( i doubt if this is possible again) then thereafter follow up with equity

meaning they are looking at maybe H2 2025 or early 2026 for the equity part (when some result reflecting ENI's purchase would have reflected in result).

Raider76:
Great analysis.

(i) and (ii) will also show whether the management and the company are turning new page as many of us are hoping.

dont count on it as a sign of change , i would rather say it is because of the debt raise

Raider76:
Guess what will be price of Oando in April 2025 if (i) Q3 2024 is disappointing (ii) no Q4 2024 results (iii) no talk of dividend, (iv) no new acquisitions.

The probability of i and ii is very low say 20% because of debt/bond it want to raise within same period and the negative effect of such on the raise

The probability of iii is 100%. nobody should count on dividend until the debt raise is concluded, effectively meaning no dividend in 2015

IV would depend on the success of the debt raise. If successful, you can be rest assured there wld be acquisition as it heads into 2016. If not successful then i struggle to see where payment for any acquisition wld come from

KarlTom:
Something is brewing could mean anything...

I am not denying the shambolic management issues.
Don't you think it is abnormal [and unusual] for such a company to undertake such kindergarten PR stunt ?

Anyway, my ears are on the ground...

My Oga i hear youuuuuuuuuuuuuuuuuuuuuu

you dont need to go far, all that is brewing is the debt/ bond OJT want to raise and hence he cannot afford any negative publicity until that is bedded. I am also positive the debt/bond is coming from outside the country (given his antecedent which would make local be quite wary and the size >500b/1 trillion) hence he is on overdrive for good publicity

KarlTom:
Something is brewing in OandO.

This media hype is quite unusual...

my broda dont be deceived nothing is brewing

it is all white washing instead of being focus on top notch corporate governance

Raider76:
Is it possible the most recent suspension has infuriated them so much they have resorted to sending out threats of delisting?

there is a possibility, so it cant be ruled out