Oando is rewarding its shareholders by giving them 1.28 billion additional shares in the form of a stock dividend.
This means shareholders will get more shares added to their investment portfolios at no extra cost. The sheer size of the offering, with 1.28 billion shares distributed, makes it the biggest shareholder reward in Oando’s history.
This decision follows the approval of shareholders at the company’s 45th Annual General Meeting (AGM) held on December 17, 2024, saying: “The company may cause shares received under sub-resolution (b) above, and/or their cash equivalent to be distributed to shareholders of record at date(s) as may be determined by the Board of Directors, from time to time, on a pro-rata basis.”
Subsequently, the Board of Directors resolved to distribute the shares in two tranches in a meeting held on January 30, 2025. The total worth of shares valued at N97,562,157,676, based on Oando PLC’s closing share price of N76 as of January 30, 2025, will be distributed to its shareholders beginning with 641,856,301 ordinary shares at the close of business on February 14, 2025, and 641,856,300 ordinary shares at the close of business on June 30, 2025.
According to the company, stock dividends are considered superior to cash dividends as shareholders are being given the choice of either keeping their return on investment or turning it to cash whenever they want; with a cash dividend, that option is unavailable. In this instance, Oando shareholders are getting a return on investment of over 10 per cent.
The increase in shares also means an increase in potential future dividends, as the more shares a shareholder owns, the more dividends they can potentially receive.
Furthermore, instead of paying cash, which could weaken the company’s future financial position, Oando said it is preserving value and ensuring shareholders benefit from future growth through this scheme. By distributing shares, the company said it can maintain a strong financial position, which is crucial for future growth and investment opportunities.
This positive news for Oando shareholders directly increases minority shareholders’ ownership stakes by one new ordinary share of 50 kobos each for every 12 existing ordinary shares of 50 kobos held by the shareholders without dilution.
This comes in the wake of Oando’s robust performance in 2024, bolstered by its $783 million acquisition of Nigerian Agip Oil Company (NAOC) in August 2024, which led to a bullish increase of over 500 per cent in its share price. The acquisition also significantly impacted the company’s FY 2024 financial results, resulting in a 45 per cent surge in revenue to N4.1 trillion. This strong financial performance should instil confidence in shareholders about the company’s prospects.
