West African oil tycoon and Tullow Oil’s largest investor Samuel Dossou-Aworet raised eyebrows on Monday when it emerged that the septuagenarian has hiked his stake in the company to 16.6 per cent from 12.7 per cent.
The businessman has been a shareholder in Tullow since 2004, having received shares as part payment for the sale of a company called Energy Africa to the Irish-founded group for $500 million (€454m). That transformational deal doubled the size of Tullow Oil at the time, giving it assets along the west coast of Africa, including Ghana, where the company would find its two largest oilfields Jubilee and TEN.
He first disclosed in December 2019 that he had breached the 3 per cent level that must be disclosed to the stock market. It was speculated at the time in the UK press that Dossou-Aworet could mount a “lowball bid” for the business. And while he would subsequently increase his interest to about 13 per cent by mid-2020, no bid ever materialised.
Tullow tried last year to merger with cash-rich Edinburgh-based Capricorn Energy to be “a leading African energy company”. However, that deal was called off last September following uproar from some of Capricorn’s largest investors.
Efforts to secure comment from Dossou-Aworet on Monday – through his Swiss-based but Africa-focused oil company Petrolin – about his increased exposure to Tullow were unsuccessful.
However, interestingly the businessman now holds a little over 2 percentage points of his Tullow holding through direct ordinary shares – he previously held his stake by way of investments in indirect financial instruments.
News of Dossou-Aworet’s increased stake follows a 12 per cent spike in Tullow’s share price in recent weeks after it offered to repurchase around $166.5 million (€151.4m) of its bonds at a discounted rate of $100 million.
While Moody’s, the debt ratings agency, has classified the deal as a distressed debt exchange, stock investors seem to be glad to see the company taking advantage of the low prices at which some of its bonds had been trading.
