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Why we are listing on Nigerian Stock Exchange – Caverton

By BusinessNews Staff on May 21, 2014

Caverton, an indigenous firm with focus on the provision of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, has explained that it is listing on the Nigerian Stock Exchange (NSE) to create a legacy business that can outlive its founders and maximise the opportunities created by the federal government’s local content policy.

The company will make history today as the first oil services company to be listed on the main board of the exchange, when the firm’s 3.35 billion shares will be listed by way of introduction at N9.50 per share.
Market analysts described the listing as a major boost for the NSE’s drive for diversification of the market and the federal government’s policy of deepening indigenous capacity and ownership in the oil and gas sector of the economy.

To accommodate the listing, the NSE has created a sub-sector called Logistics and Support Services under which the shares will be listed.
Explaining further why the company is going public, the founder and Chairman of Caverton, Mr. Aderemi Makanjuola stated that the company had reached the stage where it needs to access more capital because it is winning more contracts.

“We felt that given the significant opportunities in the market and our positioning, the use of debt-financing to fund our growth will be limiting and so undertook global case studies on companies with similar growth trajectories. After that, we decided that the equity funding route will ultimately give the best return on capital,” he said.

“Also, Caverton has got to that stage where it needs to access more capital because more contracts are coming in. We also need to train more people and ensure that Nigerian engineers and pilots derive greater benefits from the evolving opportunities and that instead of hiring people from abroad and taking out the money, we can help Nigerians to acquire the necessary capacities and hire them,” he added.

Makanjuola said the company was proud of its achievements and also humbled to be a reference point in such a tasking sector.

Even though its operations predated the passage of the Nigerian Content Act by many years, Caverton was widely seen as the poster child of indigenous capacity and ownership since 2010 when one of its subsidiaries, Caverton Helicopters, edged out long-established foreign operators to win a $648 million multi-year contract from Shell Petroleum Development Company (SPDC) for the supply and operation of seven helicopters.

Secured after a rigorous competitive bidding process, it is on record as the biggest contract ever awarded by the oil multinational to an indigenous company.

“After the euphoria of winning the Shell contract, we realised that this record also thrusts an enormous responsibility on us as a company. We felt that we were unwittingly made ambassadors for indigenous companies in the sector and that there was a need for us to demonstrate that indigenous companies with commitment and focus could achieve the same result as foreign competitors,” Makanjuola said.

The Shell contract in 2010 opened the floodgate for Caverton, with more contracts pouring in from other oil majors such as Chevron, ExxonMobil, Total and Addax Petroleum.

In 2013, the company commenced its first international operation after it won the contract to provide passenger transfer and pipeline surveillance services to the Cameroon Oil Transport Company (COTCO), a subsidiary of ExxonMobil.

Incorporated in 2008, Caverton Offshore Support Group (Caverton) is the holding company of Caverton Helicopters and Caverton Marine Limited, two Nigerian companies that have within a short period grown dramatically to become industry leaders in the oil and gas aviation and marine sub-sectors.

[This Day]

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