At the recent Sub-Sahara International Petroleum Exhibition and Conference in Lagos, the Chief Executive Officer and Managing Director of Aradel Holdings Plc, Adegbite Falade, said the majority of indigenous oil companies lack transparency. The lack of transparency has prevented many local oil firms from listing on the stock exchange.
He noted that Aradel Holdings was not left out of the blame as it was only traded on the National Association of Security Dealers and still making efforts to be listed on the Nigerian Exchange Group.
Falade disclosed that Nigeria currently had only two and a half transparent energy companies, saying the half was Aradel.
He said the mystery and opaqueness surrounding most oil businesses had made it difficult to access funds.
“Our space needs to be a little more transparent. In our space today, there are only two and a half entities, only Seplat and Oando; the half is Aradel, which is traded on the NASD, but it is on the journey to be listed on the NGX,” he stated.
Falade further noted that most companies were not listed because they were not ready for the scrutiny that comes with the process.
“Until you become a listed company, your capacity to attract financing for bigger play is very limited. The major reason why a number of our type of companies is not listed is. There is just too much mystery and opaqueness around them.
“We are not ready to open up ourselves to the sort of scrutiny that serious investors would like to ask for. So, we find ourselves unattractive. Therefore, we keep going around, trying to chase the same limited fund that is unable to open the doors for us,” he stressed.
He advised national oil companies to consider being listed, saying there are a lot of comfort that comes with it.
“Get yourself to be a listed company. What that means is that you are going to challenge your corporate governance; it means you are going to do things right. It is a pain, but it is a pain that pays off ultimately.
“Those of who have listed, we have not short of unsolicited offers from financing institutions to finance our transactions, because there is a level of you get in the fact that you are governed by a security and exchange commission, by a stock exchange and all of that,” he stated.
The Aradel boss maintained that there was a need local oil firms open up themselves to be properly seen as companies that can be invested in, “and we open ourselves up to a wider universe of available funding in the industry”.
