Japaul Oil &#038; Maritime Service Plc to become Japaul Gold &#038; Ventures Plc

Arising from its Annual General Meeting held on 29th July 2020, the Shareholders of Japaul Oil & Maritime Services Plc (NSE: JAPAULOIL) passed the following resolutions;

That the authorized Share Capital of the Company be increased from 6,000,000,000 (six billion) ordinary shares to 60,000,000,000 (sixty billion) ordinary and/or preference shares.
That the company be authorized to raise additional equity capital up to N27,000,000,000 (Twenty Seven Billion Naira) whether by way of rights issue, public offer, private placement through book building or offer for subscription, and/or other securities at such time for such consideration and upon which such terms and conditions as directors may deem fit.
That the name of the company be changed from Japaul Oil & Maritime Services Plc to Japaul Gold & Ventures Plc.
That the company be authorized to engage in Mining and Technology business activities, through partnerships and acquisitions.
That, in an attempt to raise equity, the company be authorized to carry out share reconstruction.
That the directors be authorized to do all things necessary and incidental to the achievement and fulfillment of the above special resolutions.
That the company secretary be authorized to file any requisite documents at the required regulatory bodies.
That the Audit firm of PKF be retained as Auditors and the Directors authorized to fix their remuneration.

The shareholders further approved the financial statements for the year ended 2019, and re-elected Mr. Abiodun Paul Jegede, Oluwaseyi Oyinlol & Hon. Abdulkadir Nasir as Directors.

Japaul Oil & Maritime Services Plc was incorporated on 29 June 1994 as a private limited liability company and commenced business in January 1997. Japaul Oil is in the business of oil and maritime services. The Company’s shares were listed on the Nigerian Stock Exchange (NSE). As at year end, the Company has five subsidiaries, namely:

Japaul Shipping & Offshore Services Limited
Japaul Mines & Products Limited
Japaul Dredging Services Limited
Japaul Gulf Electro Mechanical LLC Dubai UAE

The Registered office address of the company is Japaul House, Plot 8, Dr. Nurudeen Olowopopo Avenue, Central Business District (CBD), Agidingbi, Ikeja, Lagos, Nigeria.

The principal activities of the group are engaging in oil and maritime services in the upstream segment of the oil and gas industry. The group’s scope of operations covers the provision of offshore oilfield vessels, dredging activities in oil fields/locations, quarry services, maritime and logistics, oil flowlines/pipeline construction in swamps.

JAPAULOIL has seen its revenue fall off the cliff in over the past 5 years; it went from a turnover of N8.148 billion in 2015 to a mere N725.471 million in 2019. The Group reported loses in each financial year, from 2015 to 2018;

2015: A loss of N8.036 billion
2016: A loss of N7.899 billion
2017: A loss of N13.208 billion
2018: A loss of N6.593 billion

The Group was able to report a profit of N40.917 billion in 2019, arising from the “other income” column on its consolidated statement of profit or loss. A bulk of the other income arose from the profit on disposal of property, plant and equipment in the 2019 financial year.

This figure represents the settlement value of the Japaul Building, outstanding debts on Access bank, outstanding finance lease from Standard Chartered Bank (Continental 1) and Marina Lilac.

During the year, land and buildings, marine and survey equipment pledged as collateral securities for various loans obtained by the company from Access Bank have been Forcefully taken over to settle all obligations to the bank based on duly executed terms of settlement before the Federal High Court directive on suit no: FHC/L/CS/1222/2018.

Commenting about the Group’s continued existence as a going concern, the directors noted that it is dependent on the following;

Sustaining and expanding our existing quarring business;
Refurbishing and upgrading of existing equipment for hiring purposes;
Diversification into mechanised mining of solid minerals;
Advancing into smart real estate through high and blockchain technologies;
Positioning for the dredging and supply of sand and aggregate as part of the Nigerian Content Contractor for Mambilla Hydroelectric Power Project in Gembu, Taraba State.
Sustaining and growing our recent effort in retail sand mining operations at various sites across the country;
Arranging for private equity investment/funding.

In summary, it can be said that JAPAULOIL is pivoting away from the oil & gas industry, towards mining.

In the first half of the year ended 30 June, 2020, JAPAUL reported a profit of N38.293 million from continued operations, a massive improvement from a loss of N1.355 billion reported in the preceding year.

It’s latest financial statement however shows that the oil and gas sector still matter to the Group. It reported a turnover of N327.007 million in H1 2020 (H1 2019: N662.705 million), with N212.390 million coming from Japaul offshore.

Share price of JAPAULOIL doubled in 2018, on the back of a public announcement by the company on February 20, 2018 that an America Private Equity firm with Head Office in New York City; Milost Global Inc. would inject $350 million into the company.

On May 9, 2018 JAPAULOIL notified its stakeholders that the Board of the company at its meeting held on Thursday, 29 March 2018 deliberated on the proposed equity injection by Milost Global Inc. The Board resolved that in view of the numerous red flags associated with the proposed equity injection that Management should in consultation with the Company’s retained Counsel take prompt steps to pull out of the transaction in a non-prejudicial manner.

The share price of JAPAULOIL has since slumped to the floor price of shares listed on the Nigerian Stock Exchange.

JAPAULOIL Shares gained 1 kobo (4.76%) in todays trading session on the NSE floor to close at 22 kobo.

Source: Mytradebook

JAPAULOIL was at the forefront of the drive to have indigenous company participate in the Oil and Gas sector in Nigeria, and with the country looking to diversify its economy, the Group seems poised to be at the forefront of the mining sector development as well.

Written by;

Nnamdi M.