Nigerian energy firm Forte Oil said it plans to sell its upstream services and power businesses in Nigeria and divest from Ghana to focus on its core fuel distribution operation at home.
The move comes as a surprise about-turn for a company whose Chief Executive Akin Akinfemiwa told investors in Lagos in August that he wanted to aggressively pursue M&A opportunities along the energy value chain and acquire marginal oilfields to boost its upstream business.
The company, majority owned by billionaire Femi Otedola, had also been in talks with a major refinery to form a strategic partnership for local refining of petroleum products.
Forte Oil’s share price plunged 49 percent last year after the company struggled to get hard currency to import products. It now has a total market value of 57.3 billion naira ($188 mln) but gave no indication of how much the businesses for sale might fetch.
It said interest costs attributable to the businesses to be sold stood at 2.2 billion naira as of December. It now plans to seek shareholder approval for the sale on May 23 and appoint advisers, it said in a notice to investors.
The management of Forte Oil did not give a reason for the change in direction but said the downstream sector in Nigeria had gone through changes in recent years and was expected to evolve further.