Forte Oil Plc said it has raised will NGN9 billion through a series 1 debt placement.
In an email statement to PageOne Big Business Desk, the company disclosed that “This is the first series of its proposed N50 billion bond issuance programme. The Funds raised will be used to refinance existing short term commercial bank loan obligations and to finance the retail outlet expansion of the Company. The Company has an Issuer rating of A- long term and Al – short term rating by the Global Credit Rating Company (GCR).
Group Chief Executive Officer, Mr. Akin Akinfemiwa said: “with the raising of this initial capital which has been fully underwritten shows the confidence the investing public has in Forte Oil Plc as an investment of choice. This bond programme being the first in the downstream sector, is testament to Forte’s position within the downstream sector and allows the company to actualise the vision of the Board to continue to provide value to its shareholders regardless of the economic climate.”
Mr Julius Omodayo-Owotuga, Group Executive Director Finance and Risk stated that “this series provides us with the necessary liquidity to actualize our growth strategies and positions the Company for the years ahead. The pricing of this debt instrument demonstrates the markets’ belief in us and the pricing would help reduce our borrowing cost and increase profitability in the short and long term.”
The company disclosed that the bonds will be listed on the Nigerian Stock Exchange (NSE) and FMDQ OTC Exchange until maturity date in 2021.
Forte Oil also disclosed that United Capital Limited served as the lead Financial Advisor/Issuing House to this transaction while Boston Advisory Limited, FBN Capital Limited, Planet Capital Limited and Vetiva Capital Management Limited served as joint Financial Advisors/issuing House.
It could be recalled that Forte Oil announced in August that the company will be raising a total of NGN50 billion. The fact that the company has only raised NGN9 billion so far speaks volume on the challenges bluechips are facing in raising funds in an economy facing recession with a high interest rate.