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FBN Capital may fund IOCs asset divestment

By BusinessNews Staff on April 25, 2014

The Managing Director/Chief Executive Officer, FBN Capital, Mr. Kayode Akinkugbe, has said the company hopes to play a role in arranging finances in the ongoing oil and gas asset divestment by International Oil Companies operating in the country.

Akinkugbe, in an interview with our correspondent, recalled that the company was very active in the power sector last year as it arranged a number of oil and gas deals.

He specifically said the company arranged financing transactions for Accugas, Sahara Group and Forte Oil, among others, in 2013, adding that FBN Capital would also be actively involved in financing some of the oil and gas assets currently being divested by oil majors.

Akinkugbe said, “As FBN Capital, we actually act as an arranger of transactions; we don’t necessarily put our balance sheet into these transactions.

“Last year, we were very active particularly in the power space and also looked at one or two oil and gas transactions. This year, again, we expect to be actively involved in some of the divestment processes that are being done by the IOCs.

Again, we will be fulfilling our role to arrange finances particularly for indigenous companies but also for international ones.”

Shell Petroleum Development Company has put up for sale four oil blocks – OML-18, OML- 29, OML-25 and OML-24 and the bidders are Midwestern/Mart/Notore, Sahara Consortium and Dangote/Dansa for OML-18; Vertex/ Seplat/Maurel&Prom/VP Global, Glencore/Neconde, Transcorp, and Aiteo/Taleveras for OML-29.

Others are Lekoil, Crestar, GreenAcres/CCC/Signet Petroleum, NDPR/SAPETRO and Essar for ML-25.

Sahara Consortium, PanOcean/Newcross, Shoreline Aiteo/ Taleveras are also bidding for OML-24.

“We have not made direct investments; we’ve simply arranged a number of transactions,” he noted, stressing that the company was poised to support enterprises with “very strong commitment to certain standards of operations and certain strategic objectives.”

This, he said, explained its involvement in the $170m medium-term acquisition finance facility for Accugas Limited, a subsidiary of Seven Energy International Limited, where FBN Capital Limited acted as structuring bank, sole initial mandated lead arranger, financial modelling bank and global facility coordinator.

The facility was provided by FBN Bank (UK) Limited, Ecobank Nigeria Limited, Union Bank of Nigeria Plc, and Union Bank (UK) Plc.

On whether the banks were embracing oil and gas financing again, Akinkugbe said, “I think they are developing their own expertise as well as to better access the risks in the oil and gas sector. I won’t call it coming back; I will say they are developing as the industry is developing.

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