Seplat launches £301m London and Lagos float

 
Suzie Neuwirth
NIGERIAN oil and gas explorer Seplat yesterday said it has raised £300.9m in its initial public offering in London and Lagos, valuing the company at around £1.14bn.

The deal is London’s biggest oil industry flotation in years and will provide a significant boost for Nigeria’s energy sector, which has seen an exodus of international players due to the country’s political unrest.

Seplat has sold a 26.4 per cent stake, equating to 143.3m shares, with conditional dealing starting today.

Shares in London were priced at 210p per share but slipped to 207.5p in early trading, before recovering to close at 212p.

The company, which is one of the largest indigenous independent oil and gas operators in Nigeria, plans to use part of the proceeds to buy up more oil and gas assets.

Some will be used to pay down debt and around $48m (£29m) will be used to pay off a shareholder loan.

International oil majors such as Chevron and Shell have put a number of their Nigerian onshore assets on the block, after political unrest stalled operations and ate into profits.

“Despite a challenging market for oil and gas stocks, the response has been excellent and demonstrates strong demand in both London and at home for leading Nigerian indigenous exploration and production players,” said chairman Ambrosie Bryant Chukwueloka Orjiako.

“I believe our excellent production growth track record, strong cash flow and progressive dividend policy distinguish Seplat from many other exploration and production stocks.”

Chief executive Austin Avuru added: “We have a production target of 85,000 barrels of oil and condensate per day by the end of 2016 from our current assets, but our ambition is to secure acquisitions which enable us to exceed this target.”

The firm’s revenues increased by 41 per cent to $880m last year.

Unconditional dealing is expected to start on Monday.

BEHIND THE DEAL
CITIGROUP | TOM REID

1 Reid is a leading classic boat sailor in the National 18 class. For all you non-sailors, this means he can sail an 18-foot boat.

2 Reid graduated with an MA in politics, philosophy and economics from Oxford, before doing a postgraduate diploma in law. He worked at Slaughter and May before moving into finance.

3 He was head of corporate broking at Credit Suisse until 2003. At Citigroup, he has led the team for BHP Billiton since 2007 and advised Glencore on its merger with Xstrata last year.

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