Acorn Raises Additional N5bn Capital, Denies Indebtedness to AMCON

Having secured Securities and Exchange Commission’s approval for the basis of allotment of its just-concluded rights issue, Acorn Petroleum Plc said yesterday it had immediately commenced the second phase of shoring up its capital base by N5 billion.

Managing Director, Acorn Petroleum, Doyin Adeyinka, who disclosed this, said the rights issue, being the first phase of the capital raising, was successful and the SEC approval signaled completion of the phase. According to him, the conclusion of the first phase represented a significant milestone in the re-capitalisation of the company.

Adeyinka explained the second phase of the capital raising exercise will be a combination of special/private placement to selected investors during which the company hopes to fully raise the additional N5billion in new equity.

The company, he recalled, had during its last AGM obtained approval from its shareholders to raise additional equity by way of rights to existing shareholders and placement with new investors.

Adeyinka explained that, “the company will focus on the core downstream activities of distribution of petroleum products hence capital raised will be deployed towards corporate restructuring, working capital and investment in critical infrastructures like construction of storage depots at Lagos, Port Harcourt and Abuja airports, Construction of a Lubricants blending plant, expansion of its retail outlets chain, LPG Plants and the development of an ultra-modern oil terminal.”

He noted that “as part of its strategic plans and to give liquidity and exit options to its shareholders, the company has commenced the process of listing its existing shares with NASD via listing by introduction. This is expected to be concluded in December 2015. “

Besides, Adeyinka debunked the reported sale of its assets by Asset Management Corporation of Nigeria (AMCON), saying “the company does not have any assets encumbered by AMCON.:

“During 2013, the company entered into an agreement with AMCON wherein the company sold one of its assets to AMCON in full and final payment of its indebtedness. This asset was in turn leased back to the company for a period of time with an option to buy back if the company desires. So it is erroneous to report that the company asset was put up for sale when in actual fact the asset in question does not belong to the company and not carried in its books. The company is not in dispute with AMCON and the company has the right of first refusal to buy back the facility which the company may decide to exercise if it so desires,” he explained.