NNPC Misses IPO Deadline, Delays Recapitalization Efforts
Following the enactment of the Petroleum Industry Act, the national oil company transitioned into a commercial entity on July 19, 2022. During a transition ceremony, Mele Kyari, the group CEO of NNPC, had previously announced plans to launch an IPO by mid-year in 2023.
An IPO involves selling shares to institutional investors and was expected to be ready by the end of the second quarter, according to the quarterly report. However, as the third quarter unfolds, the NNPC has not yet initiated the IPO.
The report indicates that NNPC Ltd is actively working towards cleaning up its financial records as part of the recapitalization process, although no specific timeline for the IPO launch was provided.
The report read further, “The PIA provides that NNPC Ltd will be in a position to consider any initial public offer (IPO) in three years’ time.”
The company said it understands that when “you want to get ready for IPO, you need to do things differently”.
“You need to get your books correct. You need to recapitalise and shape your portfolio,” NNPC said in the document.
“With the declaration of profit-after-tax for the financial years 2020 and 2021 (and with 2022 coming up soon), NNPC Ltd is currently in good stead for an IPO declaration.
“Fingers crossed, NNPC will be IPO-ready by the second quarter 2023.”
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 and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
As per the report, NNPC would earn 30% of profit oil and gas as a management fee for production sharing contracts. The company would also be able to raise funds via loans, bonds, and other financial instruments.
