Oando is set to reward its shareholders by giving them 1.28 billion additional shares in the form of stock dividend.
The company announced at its 45th Annual General Meeting (AGM) held in Lagos.
This means shareholders will get more shares added to their investment portfolio 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 AGM, held on December 17, 2024, authorising “the Company may cause shares received pursuant to 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.
Stock dividends are considered more 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 is preserving value and ensuring shareholders benefit from future growth through this scheme. By distributing shares, the company 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 kobo each for every 12 existing ordinary shares of 50 kobo held by the shareholders without dilution.
This news 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.
Building on the track record of 2024, Oando announced the award of Block KON 13 in Angola’s Onshore Kwanza Basin in January 2025. The future remains hopeful for shareholders, as the group chief executive (GCE), Wale Tinubu mentioned in a recent statement that the company will prioritise cost optimisation, operational efficiency, streamlining processes, enhancing procurement, and leveraging technology to improve productivity across operations.
This is just the first step in Oando’s ongoing commitment to enhancing shareholder value. By distributing the shares in two phases, Oando ensures that its stock price remains strong and stable, avoiding any sudden market drops.