Ardova Plc (formerly known as Forte Oil Plc) has announced plans to issue Series 1 Bonds worth up to N22 billion, as part of its N60 billion Bond Issuance Programme. The Bond is subdivided into Tranche A and Tranche B offerings with maturity periods of 7 and 10 years respectively.
In addition, bookbuild for the Series 1 Bonds is now open and is scheduled to close on Friday, 15th of October 2021.
This is according to a mail sent from Stanbic IBTC to investors and seen by Nairametrics. Excerpts of the mail read: ‘’We are pleased to inform you that bookbuild for Ardova Plc’s (“Ardova” or the “Company”) up to ₦22 billion (Tranche A-7 year & Tranche B-10 year) Series 1 Bond Issuance under its ₦60 billion Bond Issuance Programme (the “Issue”) is now open and scheduled to close on Friday, 15 October 2021.’’
About the offering
The bond is issued at a price of N1,000 per unit payable in full on application. In addition, the minimum subscription is 10,000 units, implying that any bid below this will be disregarded unless they form part of a cumulative bid from the same investor that is greater than the minimum acceptable subscription. The coupon will be accrued from the issue date and will be payable semi-annually in arrears. Principal repayments in respect of the Bonds will be subject to an 18 months moratorium.
In addition, the Series 1 bonds will be listed in the Nigerian Exchange Limited (NGX) and/or FMDQ Securities Exchange. It is callable either in part or in whole, and can be exercised by the issuer from the expiration of 48 months for tranche A and 60 months for tranche B offers, applicable from the issuing date.
It is pertinent to note that Stanbic IBTC Capital Limited will act as the Joint Issuing House for the deal, while Vetiva Capital Management Limited will act as the Lead Issuing House. Also, Banwo & Ighodalo will be the solicitor to the issue.
On what it intends to use the proceeds of the deal for, Ardova Plc explained that the net proceeds of the issue will be used to fund the firm’s retail expansion projects, provide working capital requirements, upgrade its existing infrastructure and provide for its debt service reserve account funding.
Back story
Recall that the shareholders of the company had earlier resolved to raise additional capital of N60 billion during its Annual General Meeting which was held on the 12th of April, 2021. To facilitate this, the members recommended that the capital be raised through shares, convertible or non-convertible securities, loan, bonds or any other instrument approved by the management. As a follow-up, a subsequent Board Meeting convened virtually on 29th of April 2021, resolved to establish a debt issuance programme and authorized the company to issue Series 1 bond worth up to N25 billion in tranches and terms determined by the management.
What you should know
Ardova Plc is a leading indigenous and integrated energy company involved in the distribution of petroleum products with a strong presence in the thirty-six (36) states of Nigeria and the Federal Capital Territory, Abuja. The Company boasts of an extensive network of over 450 retail outlets and several storage facilities across the nation. The Company was incorporated as British Petroleum (Nigeria) in 1964 and is also listed on Nigerian Exchange Limited.
Further breakdown of its recent offering showed that the net proceeds from the Series 1 Bond is estimated to be around N21.51 billion, that is after the deduction of the offer costs worth N491.3 million.
As at the 30th of June 2021, the issuer’s total borrowings amounted to approximately N8.45 billion.
