Flotation marks the return of a foreign natural resources company to the UK market
Nigerian oil firm Seplat, the first ever company to be listed in both London and Lagos, was yesterday valued at over £1bn in its stock market debut.
The flotation marks London’s biggest oil industry IPO since Ophir Energy in 2011 and the return of a foreign natural resources group to the exchange after a clutch of contentious listings in the past decade.
The company has raised £300m through the listing to acquire assets in Africa’s largest oil producing nation thatwhich are being offloaded by energy majors.
Seplat’s shares began conditional trading this morning priced at 210p, valuing the company at £1.14bn and have since risen by 5p in noon trading. The company has a 25pc freefloat but will not be eligible to join the FTSE 250 index as it remains incorporated in Nigeria. Foreign companies must have a 50pc freefloat to enter into London's premier indices.
Nigeria is the world’s 12th largest oil producer but large oil majors Shell, France’s Total and Italy’s Eni are retreating from the region and selling their Niger Delta oil fields. This is because while the oil in Nigeria is of a high quality and relatively easy to drill, widespread sabotage and oil theft as well as a government drive to increase local ownership has hampered the profitability of business.
Anglo Dutch giant Shell has said that it had lost around $1bn because of theft and other disruption to its Nigerian operations last year.
The cash Seplat has raised in the IPO will put it in a stronger position to compete for the oil giants’ disposals because foreign companies must partner with Nigerian businesses to bid. The company is understood to be in the one of the leader bidders for Shell’s Nigerian oilfields.
Seplat was founded in 2009 by wealthy Nigerian businessmen Orjiako and Austin Avuru. The company pumps around 60,000 barrels per day of oil from the blocks in operates in the Niger Delta.
The company is understood to be in the one of the leader bidders for Shell’s Nigerian oilfields.
BNP Paribas, Standard Bank, Citigroup, RBC Capital markets advised on the London IPO while Renaissance Securities and Stanbic IBTC were appointed to handle the Nigerian offerin