WALE TINUBU: THE NEW FACE OF NIGERIAN BUSINESS.

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Wale Tinubu, Group CEO Oando Plc.

Wale Tinubu is group chief executive officer of Oando. Oando is a Pan-African energy corporation with operations actively spanning all aspects of the energy value chain, including the marketing and distribution of refined petroleum products, exploration and production, refining, and power generation. It is the largest non-government owned Energy Company in Nigeria and has a market capitalization worth $1 billion. Is the first Nigerian company to achieve a dual listing on both the Nigerian and Johannesburg Stock Exchanges.

Tinubu has made himself Nigeria’s most venerable energy tycoon and inserted himself atop the pecking order in the major league of Nigeria’s oil industry. His vision shaped Oando and so did his relentlessness. The business started 19 years ago as a very small service company delivering fuels to the upstream service providers and it has grown to become the largest indigenous oil and gas group on the continent.

Wale Tinubu initially wanted to be a lawyer because at the age of 16 he left Nigeria to study law at the University of Liverpool in England. As an undergraduate, he used to travel to Europe to buy luxury cars, using his school fees as capital. He then drove the car through Europe and back to London, trying his best to sell it off for a profit en route. He often succeeded. He was only 21 at the time, but he had already started making substantial amounts of money.  He probably never realized it at the time, but it was the genesis of what was to be a successful career in deal making.

After his first degree, he earned a Master’s in Law from the London School of Economics at the age of 22. He had to attend law school in Nigeria before he was allowed to practice. After law school, he started out as a lawyer at his father’s firm. It wasn’t long before he realized that the legal route was not for him. He decided there and then to launch his own business. He wanted to be in charge and in control.

Tinubu set up his first office in his father’s garage. To stay afloat, Tinubu broke even by handling small corporate legal jobs right from his garage office.  He continued with his legal practice until the opportunity he had been waiting for came knocking. A friend, Jite Okoloko, who would later go on to become an executive director at Oando, had been offered a rather lucrative contract by Unipetrol, a government-owned refinery in Port-Harcourt to fill up fishing trawlers in Lagos. Okoloko was looking for a vessel to transport the diesel.

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Wale Tinubu during an inspection at Oando facilities.

Coincidentally, Omamofe Boyo, a close friend of Tinubu, who was also a lawyer, represented an oil services firm which owned a 1945 World War 2 tanker, The Carolina, Tinubu realized they could charter the ship to fulfill Unipetrol’s requirements. First, he had to calm the nerves of the ship’s crew down because they were angry for not being paid. He offered to charter the ship and promised to tend to their welfare needs. This made the crew excited and ready to work for him. He also got the money to charter the ship from his parents who offered him $10,000 to do so.

You would think Tinubu would have been making money since he was doing business with Unipetrol, a major oil company in the world, but he wasn’t being paid on time. He learnt that bigger companies had a tendency to drag their feet when it came to paying up. He didn’t have enough money to pay for the charter of his ship. As his debts increased the owners of the ship began to lose patience with him. He offered to buy the ship from its owners on credit and they agreed to sell it for $100,000 to Tinubu. Once again, he didn’t have the money but he was determined to buy the ship. In his bid to raise funds, he approached a small finance company for the loan.

With $100,000 he bought the ship. This was a defining moment in his life. And he had to pay back the loan at a high interest rate set at 10% a month. He set off to pay his debt which was not easy because the oil trading business at that time was even more strenuous than it is today. Despite the toughness of the oil trading business Tinubu’s small oil trading operations prospered. The ship proved to be a smart acquisition because it was profitable and it made its value every month. Before long he paid off the loan.

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Wale Tinubu gracing the cover of Forbes Magazine.

Tinubu’s company grew its fleet from one ship to two, three and then seven ships. Within a few years of operations, Ocean and Oil had become the undisputed leader in the supply and trading of fuels products. The biggest opportunity came in the year 2000 when the Nigerian government sought to divest its shareholding in Unipetrol, a leading petroleum marketing company. The government had decided it was going to divest its shareholding by selling 10% to the public and 30% to a strategic private investor. The government called for bids from prospective investors. Tinubu and his two friends, Mofe Boyo and Jite Okoloko, decided to bid.

The price for the 30% stake was put at $16 million. Even though Tinubu was making profits from his oil trading business, he did not have that money. But he wasn’t deterred at all. The three friends put in their bid for the stake and held their breath.  Tinubu and his friends were not up to 35 at that time yet they were seeking to gain control of one of Nigeria’s largest petroleum companies. The odds were against them. He had no political connections and yet he and his team won they bid.

But analysts and critics believed that Wale Tinubu and his new team lacked the experience and wherewithal to effectively manage a corporation as huge as Unipetrol. It caused uproar in several quarters and the Bureau of Public Enterprises (B.P.E) was under immense pressure to relinquish the sale. Because the BPE would not reverse its decision for legal reasons, it set new rules b giving Tinubu and his team only two weeks to raise money of which they would lose the Unipetrol deal.

He overcame this problem by obtaining a $10 million loan from a local bank and selling equity in Unipetrol to a venture capital company for $5 million. He also had $1 million in cash. Once again, Tinubu had beaten the odds set against him.

Employees at Unipetrol were less than impressed with the successful acquisition by Tinubu and his team. They could not stand the idea of the company being led by three young executives under the age of 35 and refused to work under this new leadership. This was a frustrating time for Tinubu. He realized that he could never win without the support of the team but he also knew that he couldn’t address the whole team at the same time. He identified the union leaders and major movers of the union and separated them from the crowd and held talks.

He succeeded in convincing the union leaders by making the following promises and appealing to their self interest, that there would be no layoffs, employees due for promotion would be promoted and a better welfare package for everyone. The uproar died down and the employees were ready to work again.

In 2002, Unipetrol (under Wale Tinubu) acquired 60% equity in Agip Nigeria Plc from Agip Petroli International. Unipetrol later merged with Agip in 2003 and the new merged company was rebranded Oando Plc. With the merger, Oando emerged as the largest downstream company in Nigeria. It now has retail outlets in Benin, Ghana, Sierra Leone and Togo.

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