Local owned companies such as Seplat, Oando has in the last three years acquired the upstream assets of major IOC’s such as Shell, COP, Agip etc. Most of these deals where financed by local banks and according to the Managing Director and Chief Executive Officer of Fidelity Bank Plc, Mr. Nnamdi Okonkwo, his bank and some other Nigerian banks accounted for about $2.5 billion used by some Nigerian independent firms to acquire the divestment of these onshore assets. Here is what he had to say as reported by Thisday.
“The Nigerian Content Development and Monitoring Board (NCDMB) has recorded successes in the oil service space. The E&P space is where they have challenges.
“In the E&P space, we participated in the divestment carried out by Shell by supporting companies in providing finance for their acquisitions and subsequent operations.
“We intend to continue in the future as opportunities arise. In the new Shell divestment programme, Nigerian banks participated by raising up to $2.5 billion to support indigenous companies, which shows our commitment to the local content initiative,”
he said.
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Would be great to see the actual details of the loan !
Will Oando or Seplat default ? umm
However with a significant drop in cashflows of the acquirer, I wonder how long they hedged for ! Somebody is surely taking the hit
The short term remains worrisome for both the banks and oil producers !
Nice one , Nairametrics