The Nigerian National Petroleum Company (NNPC) Limited has missed the deadline for the launch of its initial public offering (IPO).
This is contained in the national oil company’s latest quarterly report published on Monday.
On July 19, 2022, the national company transitioned from a state-run oil corporation to a commercial venture, in line with the Petroleum Industry Act (PIA).
Speaking to journalists at the transition ceremony, Mele Kyari, group chief executive officer (GCEO) of NNPC, said the company would be ready to launch an initial public offering (IPO) by mid-year in 2023.
An IPO is a public offering in which shares of a company are sold to institutional investors.
According to the quarterly publication, the NNPC was expected to be IPO-ready by the end of the second quarter (Q2).
But it is almost a week into the third quarter (Q3) of 2023, yet no IPO has been launched.
“NNPC Ltd is making a deliberate effort to properly clean up its books towards recapitalisation,” the report reads.
“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.
FUNDING STRATEGIES FOR NNPC LIMITED
Meanwhile, the publication said the national oil firm would keep 20 percent of its profit as retained earnings to grow its business.
NNPC would also 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), it added.
“NNPC Ltd will earn 30 percent of profit oil and gas as management fee for production sharing contracts (PSCs),” the publication further reads.
“NNPC Ltd will be able to raise funds via loans, bonds, and other financial instruments.”