Nigerian integrated downstream oil and gas group Rainoil Limited has completed the acquisition of a majority stake in Eterna Plc, a lubricant and chemical manufacturer and marketer in Africa’s largest economy.
Rainoil is a prominent player in the Nigerian oil industry, operating under the leadership of Group Managing Director Gabriel Ogbechie, who founded the energy company in 1997.
The group’s operations span the downstream value chain and include petroleum product storage, haulage, distribution and retail sales, while its primary products are petrol, diesel, kerosene and liquified petroleum gas.
Information gathered by Billionaires.Africa revealed that Rainoil made the acquisition in a cross deal worth N10.73 billion ($26.1 million) through Preline Limited, an investment vehicle owned by the Nigerian downstream oil and gas company.
The purchase of a total of 794,969,774 ordinary shares, or a 60.98-percent stake in Eterna, by the energy group at a price of N13.5 ($0.0329) per share, was negotiated in a cross deal by Cordros Securities Limited, which acted as the buyer for the Ogbechie-led group.
Ogbechie said the acquisition aligns with the group’s targeted expansion strategy across the oil and gas value chain, as its investment in Eterna will position the group for sustainable growth and superior value creation for all stakeholders.
“It also underlines our commitment to Nigeria at this critical evolution point of the energy sector. We also expect that this will reinvigorate the fortunes of Eterna Plc and optimize the company for improved performance,” he said.
The deal follows an earlier statement that substantial shareholders in Eterna have executed a sale and purchase agreement, enabling Rainoil to acquire 794,969,774 ordinary shares, or a 60.98-percent stake, in the oil marketing company.
Over the past 24 years, Rainoil has increased its asset base to include three ultra-modern petroleum product storage depots in the Delta, Cross River and Lagos states, and an 8,000-metric-tonne liquified petroleum gas storage facility in Lagos State.
It operates through more than 100 retail outlets across Nigeria and manages a fleet of over 140 petroleum product tank trucks for delivering products to its network of stations and customers countrywide.
As of the closing of the Nigerian Exchange yesterday, Nov. 1, shares in Eterna closed at a price of N8.65 ($0.02100), 9.94-percent lower than the closing price on Fri., Oct. 29.
At the current price, the company’s market capitalization is N10.16 billion.
In the first nine-months of its current accounting period, Eterna posted a total revenue of N61.37 billion, compared to the N44 billion reported during the same period last year.
Meanwhile, profit expanded from N193.6 million to N416 million thanks to the resurgence in the demand for oil and gas products in Nigeria.