Forte Oil Shareholders Endorse Divestment, Sale of Ghanaian Assets

Shareholders of Forte Oil Plc have given a nod to the proposal of the board of directors to restructure the business by divesting of its upstream services, power generating businesses in Nigeria and downstream business in Ghana.

The approval was given by the shareholders at the annual general meeting in Lagos, saying the proceeds from the divestment be used to fund the downstream marketing business.

In the notification to the Nigerian Stock Exchange (NSE) yesterday, the General Counsel of Forte Oil Plc, Mr. Akin Olagbende said of the resolutions at the AGM was that: “Subject to the approval of regulatory authorities, the directors of the company be and hereby authorised to restructure the company by divesting its upstream services business(Forte Upstream Services Limited); its power generating business (Amperion Power Distribution Limited and its downstream business in Ghana(AP Oil & Gas Ghana Limited) at such time and such terms and condition as may be determined by directors of the company.”

There were mixed reactions from shareholders over the proposal before the AGM. However, it was gathered that the directors gave further explanation to the shareholders why the decision was taken.

Forte Oil Plc had said its decision to focus on divest from upstream services and power generating businesses will boost its distributable earnings for the benefit of shareholders.

According to Forte Oil Plc, following the significant changes in the oil and gas industry in recent years, it believed that only downstream operators with huge investments in both storage and distribution infrastructures can remain competitive and operationally efficient in the long run.

It explained that although power business profitable, it has huge receivables due from the Nigeria Bulk Electricity Trading Plc (NBET) and a significant portion of its distributed earnings is also utilized in servicing the acquisition debt finance.