Fears are currently being expressed by economy watchers that the proposed divestment of its 60 percent stake from Mobil Oil Nigeria by its parent company, ExxonMobil Oil Corporation’s may lead to capital flight which will likely create additional setback to the nation’s economy.
They expressed the fear that the divestment may cripple the shares of Mobil Oil Nigeria Plc and the company’s fundamentals.
Mobil Oil Nigeria in a statement to the Nigerian Stock Exchange (NSE) on Wednesday hinted that majority shareholders of ExxonMobil Oil Corporation agreed to sell its 60 percent shares in Mobil Oil Nigeria to Nipco Investment Limited, a wholly-owned subsidiary of Nipco Plc.
MD/CEO Enterprise Stockbrokers Plc, Mr. Rotimi Fakayejo, in reaction to the latest development from ExxonMobil Oil said the divestment is a setback to the capital market and general investing public.
According to him, Nigeria that is facing economy recession needs more Foreign Direct Investment and not capital flight as it is with ExxonMobil Oil 60 percent divestment in Mobil Oil Nigeria.
He said, “With the latest development from ExxonMobil Oil Corporation, I think it is a setback to the economy at the time Nigeria is seeking Foreign Direct Investment.
He urged Federal government to investigate the reason behind ExxonMobil divestment from Mobil Oil Nigeria Plc.
He expressed further that, “the divestment has not added value to economy. ExxonMobil should have expanded its business operations and not selling 60 percent shares in Mobil Oil Nigeria Plc.”
Also speaking on the issue, The Managing Director and Chief Executive Officer of Cowry Asset Management Limited, Mr. Johnson Chukwu said, “It depends on how the investing public view Nipco, the Nigeria petroleum marketing company that acquired the shares from Mobil.
“If the perception is that Nipco is a focused, aggressive and well-managed company with robust corporate governance standards, then the share price will rally but if the opposite is the case, the company’s share price will be on offer with the attendant drop in price.”
The share price of Mobil Oil Nigeria remained flat at N186 at the end of trading activities on Wednesday.
Analysts are however of the opinion that increased economy challenges should be attributable to foreign investors exit.
For instance, Diageo Plc early this month canceled its plan to take offer 15.7 per cent of Guinness Nigeria.
The Company Secretary, Guinness Nigeria, Rotimi Odusola in a statement said, Diageo will not proceed with potential offer to increase its equity stake in Guinness Nigeria.
Guinness Nigeria on October 19, 2016 has share outstanding of 1.506 billion with share price of N78.91 kobo which make it market value to stand at N118.8 billion. Diageo was planning to increase its stake in Guinness Nigeria by 15.7 per cent amounted to N23 billion.