Why we are listing on the stock exchange, by Caverton

Caverton, a leading provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, is transiting from a private to a public company 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’s 3.35 billion shares will be listed by introduction on the main board of the Nigerian Stock Exchange (NSE) today at N9.50 per share. The shares will be listed under Logistics and Support Services, a new sub-category created by the NSE.

This listing makes Caverton the first oil services company to be listed on the Exchange, a move seen as a major boost for NSE’s drive for diversification of the bourse and Federal Government’s policy of deepening indigenous capacity and ownership in the oil and gas sector of the economy.

Explaining why the company is going public, Aderemi Makanjuola, founder and chairman of Caverton, said: “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 we 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.

“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.”
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, two highly technical and capital intensive areas previously dominated by foreign firms.

Even though its operations predated the passage of the Local Content Act by many years, Caverton has been 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 for the supply and operation of seven helicopters. Won after a rigorous competitive bidding process, it is on record as the biggest contract ever awarded by the oil multi-national to an indigenous company.

“We are proud of our achievements thus far and humbled to be a reference point in such a tasking sector,” added Makanjuola. “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.”

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.