Directors of Japaul’s shares’ approves reconstruction of the company

Directors of Japaul Oil & Maritime Services Plc have approved the continuation of the balance sheet restructuring and shares reconstruction of the company.

In a regulatory filing after the board meeting at Japaul, the board of the company stated that it approved the continuation of the shares reconstruction exercise through convening of court ordered meeting in order for shareholders to consider the specific particulars of the balance sheet restructuring and reconstruction.

The board noted that shareholders of Japaul had at the recent annual general meeting approved the general nature of the share reconstruction.

The board also approved the third quarter results of the company showing total turnover of N997.74 million and profit after tax of N91.05 million.

At the annual general meeting (AGM), shareholders had approved the change of the company’s name from Japaul Oil & Maritime Services Plc to Japaul Gold and Ventures Plc to reflect its new business focus from oil and gas servicing sector into natural resource management, specifically the exploration, mining, processing and export of minerals such as gold and lithium among others.

Shareholders also approved the reconstruction of all existing ordinary shares of 6.0 billion ordinary shares of 50 kobo each while also authorising increase in authorised share capital to 60 billion ordinary shares. After the reconstruction, shareholders mandated the board to undertake public offering through combination of any of book building and public offer to raise $70 million or its naira equivalent through all possible legitimate means.

The net proceeds of the proposed new capital raising will be used to finance the completion of expanded explorations; mining activities; mineral processing; export; engineering design; procurement; installation of a gold processing plant and working capital among others.

Chairman, Japaul Oil & Maritime Services Plc, Mr. Paul Jegede said the changes underscored the company’s commitment and proactive nature in exploring opportunities to bring value to its shareholders.

According to him, the diversification was due to the belief that natural resources are a viable substitute for oil, as necessitated by oil prices which have been nosediving even before the COVID-19 pandemic.

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“The mining of these natural resources is not only profitable, it is without any negative impact on the environment,” Jegede said.

He noted that Japaul has already acquired mining and exploration licences through buy-overs for the exploration, mining and exportation of gold, lithium, copper, tin, lead and zinc across seven states in Nigeria where strategic minerals have been discovered in commercial quantities and reserves.

He added that the company has also started a landmark restructuring and transitioning to become Nigeria’s first indigenous publicly quoted company in that space.

Group Managing Director, Japaul Oil & Maritime Services Plc, Mr Akin Oladapo said the diversification is as a result of the company’s five-year growth plan.

“We had the foresight that the situation of the oil and gas sector would not improve for a long time, which is the case today. We started training ourselves in mining-related businesses and the rest is history. We have bought mining and exploration licences for Gold, Lithium, Lead, Copper, Tin, Zinc etc., which our company will be working with,” Oladapo said.

He said the company already have Canadian expatriates that have been doing explorations works for it, specifically, MATRIX GEOTECH in Toronto, Canada, adding that the company’s strategy is to start mining gold as from 2021 to 2022 while exploration works continue on other licences that it has.

“With this new business focus, Japaul Gold and Ventures Plc is already positioned strategically for the supply of the oil of tomorrow to international markets which have unlimited demand as the world makes a more mineral-intensive transition from fossil fuel to low-emission energy and from the industrial revolution era to the use of more advanced technologies,” Oladapo said.

Jegede explained that the oil and gas servicing sector has been posing a whole lot of challenge as about $150 million was invested by the company for the purchase of different marine vessels, which have since stopped bringing returns to the shareholders because there have been no contracts with international oil companies (IOC) to engage them.

According to him, the few jobs available with the IOC became so competitive to the extent that the company had to give out a number of its vessels at daily charter rate which is below cost of operations. For instance, the AHTS vessel that it used to give out on charter for $30,000 per day came down to less than $10,000 per day which is even far less than the cost of running the vessel per day.

“With this situation, we have been incurring losses for some time now and no dividend is being paid and debt in the bank was mounting. The company was finding it difficult to meet her various obligations. The way the daily charter rate for the vessels was going down is the same way the value of the vessels, which are the main assets of our company, was going down. The vessels became worthless,” Jegede said.