Management is currently making efforts to sign a binding agreement with each prospective equity provider. Management is hopeful, yet uncertain of the success and timing of the bond and equity raises.
These conditions together with other matters, indicate the existence of significant uncertainty that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern and therefore may be unable to realise its assets and discharge its liabilities in the ordinary course of business.”It also flagged three transactions that the company had been involved in, one being a $20m loan agreement between Oando Servco Nigeria Limited (an indirect subsidiary of Oando PLC) and OODP BVI (a subsidiary of Whitmore Asset Management Limited), owned by the Group Chief Executive and Deputy Chief Executive of Oando Plc, for the purpose of providing funds for OODP BVI corporate activities.A forex forward contract between Oando Servco Nigeria Limited and Argentil Asset Management Limited and concerns about PMS purchased from Russia which was sold to NNPC were also listed under the Emphasis of Matters segment of the report.On the oil purchase,
the independent auditor said, “We draw attention to Note 45(item v) which indicates that Oando Trading DMCC (a subsidiary of the Parent Company), using the signed Novation Agreement among OTD, NNPC and Litasco SA, purchased four PMS cargoes which were originated from Russia. These cargoes were sold by the Company to NNPC.reseb
- Oando Plc has reported a significant profit decline of 44% in its latest financial results.
- This drop highlights challenges the company is facing in the current market environment.
- Factors contributing to the reduced profit may include fluctuations in oil prices, operational costs, and market competition.
- The report indicates that Oando is taking steps to address these challenges and improve its financial performance moving forward.
- Stakeholders are closely monitoring the situation for any strategic changes the company may implement in response to this downturn.
The purchase of cargoes from Russia is subject to the OFAC and United Kingdom sanctions and regulations.
- There are sanctions on crude oil and related products originating from Russia imposed by the US, EU, and UK governments.
- These sanctions include a price cap and a prohibition on UK citizens from participating in transactions related to such products, regardless of their location.
- Management’s position, supported by an independent legal opinion, indicates that OTD, as a non-United Kingdom national, is not subject to the United Kingdom Sanction Regime and Regulation, according to the auditor’s assertion.
- Purchase of cargoes from Russia falls under the OFAC and United Kingdom sanctions and regulations.
- There are sanctions on crude oil and related products originating from Russia imposed by the US, EU, and UK governments.
- These sanctions include the application of a price cap and a prohibition by the United Kingdom on its citizens being involved in the execution or operations of such transactions, regardless of their location.
- The note includes management’s position based on an independent legal opinion stating that OTD, being a non-United Kingdom national, is not subject to the United Kingdom Sanction Regime and Regulation, as asserted by the auditor.
- Oando Plc reported net liabilities of N460.1bn for 2023, up from N243.9bn in 2022.
- The Group experienced a total comprehensive loss of N70bn for the year ended 31 December 2023, compared to a profit of N56.8bn in 2022.
- As of 31 December 2023, current liabilities exceeded current assets by N1.6tn, an increase from N816.8bn in 2022.- The Group’s net liabilities rose to N267.2bn, compared to N197.2bn in the previous year.
- Management is focused on refinancing debts to address a funding gap of N3tn and N1.4tn for the years ending 31 December 2024 and 2025, respectively.- If successful, planned actions will only cover 53.6% of the projected funding gap for 2024, with additional equity raises needed to address the remaining 46.4%.
- There is significant uncertainty regarding the Group’s ability to continue as a going concern, impacting asset realization and liability discharge.- The report flagged a $20m loan agreement between Oando Servco Nigeria Limited and OODP BVI, owned by the Group’s Chief Executive and Deputy Chief Executive.- It also mentioned a forex forward contract with Argentil Asset Management Limited and concerns about PMS purchased from Russia and sold to NNPC. The independent auditor highlighted that Oando Trading DMCC purchased four PMS cargoes from Russia, which were subsequently sold to NNPC.
