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NNPC Acquires African Petroleum

Posted by By Hector Igbikiowubo on 2005/11/16 | Views: 1652 |

NNPC Acquires African Petroleum


THE Nigerian National Petroleum Corporation (NNPC) has finally acquired controlling equity interest in AP Plc following the company's board agreement to convert into equity, the outstanding N11 billion indebtedness to the corporation.

THE Nigerian National Petroleum Corporation (NNPC) has finally acquired controlling equity interest in AP Plc following the company's board agreement to convert into equity, the outstanding N11 billion indebtedness to the corporation.

While this ends a four-year controversy over the outstanding debt claim, it was gathered that the Nigerian Stock Exchange (NSE) may have given debt-for-equity transaction an approval-in-principle (AIP) while awaiting the outcome of an impending Extra-Ordinary General Meeting planned for all AP shareholders.

Vanguard gathered that the decision to convert the debt into equity was reached after a two-day meeting last week with AP management, the Pipeline and Products Marketing Company (PPMC) and the Nigerian Stock Exchange. Apart from agreeing to allow NNPC take up equity in the oil marketing company, the path to an amicable resolution of the controversy was also smoothen after the AP secured funds from a new generation bank to pay for all current lifting of fuel by AP from NNPC depots across the country.

AP also secured guarantee for payment for the next one year on all lifting, implying that the guarantor would be held liable if the oil marketer default in payment. Consequent upon the agreement, it was gathered that the NNPC would very soon lift the ban placed on AP in lifting of premium motor spirit (PMS) or petrol from its depots as well as on the use of the corporation's facilities, including jetties for the receipt and distribution of petroleum products through the coastal waters.

An official of AP who spoke on the basis of anonymity said according to the agreement reached between both parties, a greater percentage of the N11 billion debt would be converted into equity, while a smaller percentage would be paid back.

"Please I don't want my name in print, but I can assure you that we have reached an amicable settlement and we plan to hold an EGM to get all the shareholders to ratify this agreement, the official said. The official also said contrary to the position of some members of the management against accepting the terms, the company's Chairman, Mr. Peter Eloka Okocha, was more interested in the survival of the company. "He just did not want a long drawn out tussle that would have resulted in loss of jobs and income," the official said.

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