Oando Plc (“Oando” or the “Group”), Africa’s leading indigenous energy group listed on both the Nigerian Exchange Ltd. (NGX) and the Johannesburg Stock Exchange (JSE), is under fresh pressures after warning that significant working capital deficiency as well as financial constraint could put its future at risk.
Africa’s leading indigenous energy company said in a Monday filing that there is substantial doubt about its ability to continue as a going concern.
The inevitable warnings come after a liquidity constraint bordering on mounting financial obligations that has not been met, which exposes the entity to bankruptcy risk.
For instance, Oando is accumulating short-term debt (e.g., accounts payable or short-term loans) much faster than it is generating cash or receivables, which are pernicious or deleterious to the company’s balance sheet.
It is obvious that the oil and gas giant cannot cover its immediate bills without liquidating long-term assets, which means a current assets of N2.84 trillion as at December 2026 cannot cover current liabilities of N6.60 trillion, according to MoneyCentral calculations.
The company is technically insolvent as its total liabilities of N8.01 trillion as at December 2025 exceeded total assets of N7.44 trillion, which resulted in a negative shareholders funds of N566.97 billion.
Defaults and Breaches of Financing Arrangements
According to a document seen by MoneyCentral, the company admitted defaulting on multiple borrowing arrangements across several financing facilities, indicating significant financial stress. Failure to meet obligations resulted in events of default and reclassification of the affected borrowings to current liabilities.
It is important to note that the reclassification of borrowings to current liabilities significantly increases short-term repayment pressure. Extensive security over assets has been pledged to lenders. These defaults expose the Group to potential enforcement of security over key assets, which may have a material adverse impact on operations.
Medium-Term Loan
As of 31 December 2025, the Group (through the Company) could not achieve payment of a total obligation of N113.6 billion as follows: outstanding principal of N76.9 billion, accrued interest of N21.1 billion, default interest of N8.7 billion and advisory fees of N6.9 billion.
Failure to pay the total obligation has resulted in an event of default under section 22 of the original MTL agreement. The default has resulted in the accounting classification of the outstanding principal amount of N76.9 billion as a current liability in Oando’s consolidated and separate financial statements.
The Lenders have not issued an event of default as of the date of approval of the consolidated and separate financial statements. The lenders may, in addition to the declaration of an event of default, seek to enforce their rights in the Security Deed dated 30 June 2016. Under the Security Deed, the borrower (the Company) agreed to fixed charge and floating charge securities in favour of the Security Trustee for the benefit of the lenders.
Analysts are of the view that Oando prioritizes acquisition over strengthening its balance sheet and achieving improved operating efficiency.
They said the oil and gas giant should emulate the consumer goods firms who are initiating capital raising and financing programmes aimed at deleveraging and restoring financial stability in the aftermath of the foreign exchange volatility.
Financial Performance
Oando’s Group revenue declined 22.2 percent year-on-year to N3.2 trillion in full year (FY) 2025 (FY 2024: N4.1 trillion), reflecting lower trading volumes following a deliberate rebalancing of the Trading Division’s portfolio amid structural changes in the domestic downstream market. This was partly offset by stronger upstream contributions, supported by higher production volumes following the consolidation of the NAOC JV interests.
The company reported a gross loss of N2.8 billion in full year (FY) 2025, compared with a gross profit of N93.3 billion in FY 2024, reflecting margin pressure arising from a higher operating cost base associated with the expanded asset portfolio and transition to operatorship.
Profit after tax decreased 7.0 percent year-on-year to N204.8 billion in FY 2025 (FY 2024: N220.1 billion). Earnings per share increased 27.8 percent year-on-year to N23 per share (FY 2024: N18 per share).
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