Dangote Group and NNPCL clash over a $1 billion loan, with Dangote Group refuting claims of refinery liquidity issues.
Dangote Group , owners of Dangote Refinery , and the Nigerian National Petroleum Company Limited, NNPCL , have clashed over a $1 billion crude oil -backed loan. Recall that barely 24 hours ago, in a statement credited to NNPCL spokesperson Olufemi Soneye, the state-owned oil firm said it secured a $1 billion loan backed by crude to support the Dangote Refinery during liquidity challenges. However, Dangote Group spokesperson, Anthony Chijiena, has described NNPCL 's claim as misinformation.
The company clarified that the $1 billion crude backed loan is about five percent of the total investment that went into building the 650,000 barrels per day refinery. According to him, it is inaccurate to say NNPCL facilitated $1 billion for Dangote Refinery amid liquidity challenges. Chijiena explained that NNPCL had proposed a 20 percent stake investment valued at $2.76 billion in the Dangote Refinery, but that didn't materialize. He noted that NNPCL was able to invest $1 billion, which amounts to 7.24 percent equity value. 'Our decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest offtaker of Nigerian crude and, at the time, the sole supplier of gasoline into Nigeria. 'We agreed on the sale of a 20 percent stake at a value of $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of 5 years through deductions on crude oil that they supply to us and from dividends due to them. 'If we were struggling with liquidity challenges, we wouldn't have given them such generous payment terms. 'As of 2021, when the agreement was signed, the refinery was at the pre-commission stage. In addition, if we were struggling with liquidity issues, this agreement would have been cash-based rather than credit-drive
Dangote Group NNPCL Loan Refinery Crude Oil
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