By Moses Patience Chat
The Nigerian National Petroleum Company (NNPC) Limited has failed to meet the deadline for the start of its initial public offering.
This was revealed in the country’s oil company quarterly report, which was published on Monday.
An IPO is a public offering where a company sells shares to institutional investors. NNPC was expected to be ready for an IPO by the end of the second quarter, according to the quarterly report.
The Group Chief Executive Officer (GCEO) of NNPC, Mallam Mele Kyari, had previously announced that the Company would be ready to launch an IPO by mid-year in 2023 during a transition ceremony.
“NNPC Ltd is making a deliberate effort to properly clean up its books towards recapitalization,” the report reads. The PIA provides that NNPC Ltd will be in a position to consider any initial public offer (IPO) in three years.
“ When you want to get ready for IPO, you need to do things differently. You need to get your books correct. You need to recapitalize and shape your portfolio,” NNPC said in the document.
“Once an IPO is floated, the opportunity to own shares in NNPC Ltd will be open to all interested persons, the report added.
The quarterly report also stated that the NNPC would retain 20% of its profits as retained earnings to grow its business.
Additionally, the company would charge a fee for tasks carried out at the request of the Nigerian Upstream Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The report further disclosed that NNPC would get a 30% profit on oil and gas as a management fee for production-sharing contracts and also be able to raise funds via loans, bonds, and other financial instruments.
