The Nigerian National Petroleum Company Limited has failed to meet the deadline for the start of its initial public offering.
The national oil company’s quarterly report, published on Monday, stated that the company missed the deadline for its initial public offering.
The company became a commercial venture on July 19, 2022, following the Petroleum Industry Act. The group CEO of NNPC, Mele Kyari, had previously announced that the company would be ready to launch an IPO by mid-year in 2023 during a transition ceremony.
An IPO is a public offering where a company sells shares to institutional investors. The NNPC was expected to be ready for an IPO by the end of the second quarter, according to the quarterly report. However, it is now the third quarter, and no IPO has been launched yet.
“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.
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.