During its 45th Annual General Meeting (AGM) which held on the 17th of December 2024, Oando shares gave approval for a special bonus issue. The shares were in lieu of loans granted to the firm’s CEO Wale Tinubu and DCEO Mofe Boyo.

The resolution was as follows 

The Company may cause shares received pursuant to sub-resolution (b) above, and/or their cash equivalent to be distributed to shareholders of record at date(s) as may be determined by the Board of Directors, from time to time, on a pro-rata basis. 

4,279,042,282 shares will be distributed to shareholders. 

Last week, the company issued a notice providing some colour on the transaction. 

In the first phase, 1,283,712,601 shares will be distributed to shareholders in two tranches. 

 Tranche 1 641,856,301 

Tranche 2 641,856,300

The qualification date for the first tranche is  February 14, 2025 for tranche 1

The  qualification date for the second tranche is June 30, 2025 for tranche 2. 

For tranche 1, the shares shall be distributed on the basis of 1 share each for every 12 existing shares held as of the qualification date 

The notice also states that the total number of shares to be distributed under the bonus issue shall be distributed within a period of 36 months commencing 30th January 2025.

There is a need for clarity on the following 

How were those dates arrived at? 

Why are the shares not being distributed at once, since no new shares are being issued, so there is no worry about dilution? 

Why have a timeline of 3 years for  the shares to be distributed? 

Why not distribute the shares immediately, so shareholders who wish to sell can do so. Oando currently has negative retained earnings so a dividend payment may not happen in the near term.

Since the resolution says and or the cash equivalent, for the sake of clarity it would have been better to state the exact amount borrowed and currency. That way it would be easier for investors to place a value to the transaction. Especially investors who are unfamiliar with the company and may want to qualify for the bonus. 

The arcane nature of Oando financials means many investors, may struggle to connect the dots together.