KPHL urges beneficiaries to sign Vendor Financing agreement

Kumul Petroleum Holdings Limited (KPHL) Managing Director, Wapu Sonk, has advised beneficiary groups who have yet to exercise the Kroton Equity Option to consider the vendor finance option provided by KPHL.

Sonk said this in response to statements by beneficiary groups from the Wellhead and Facilities areas of PDL 1 (Hides), PDL 2 (Kutubu), PDL 7 (Hides 4) and, PDL 8 (Angore) who have refused outright the vendor finance option.

They claimed that KPHL is riddled with a massive debt of over K9 billion and said there will be no value to the shares they acquire.

The group also said they are still awaiting a response from the Government on ‘14 Critical Demands’ which they presented to the Deputy Prime Minister, Leo Dion, on November 2016.

They  are also asking the Government to accept the price they have offered to purchase the Kroton shares in place of the price set by the Government.

Sonk informs Loop PNG that the beneficiary groups should consider the vendor finance option because any attempt by the beneficiary groups to renegotiate the Umbrella Benefit Sharing Agreement of 2009 may be a lengthy process.

“KPHL only stepped in and provided a safety net solution because all the landowner beneficiaries and the affected Provincial Gov’ts have not provided the consideration price for the shares in Kroton offered to them in Kokopo in 2009.

“The commercial option is a commercial matter for KPHL to work with the beneficiaries. All the negotiations with Government was already done and agreed and signed in Kokopo in 2009 so there is no negotiations to be had now. We are only executing and implementing the agreement signed in 2009,” said Sonk.

Sonk further added “The statement seems to suggest that they want to negotiate again with Government and that is totally outside of KPHL’s mandate.

“I wish to advise the beneficiary groups that they should consider accepting the Vendor Financing option provided by KPHL as a fall back option because negotiation with Government can be a lengthy process and if they are not successful, it can mean that the option has lapsed and there is no commercial option available to even talk about.”

Regarding the KPHL debt, the company says “The level of debt in Kumul and its subsidiaries can be questioned but what about the questions of the value of the Assets it owns?”

“You can’t assess a company just from the debt alone and this seems to be the case here. Did they disclose what the Company is worth and what its cash flow position is in the same year?

“KPHL has a strong balance sheet and is a very solvent Company so this misleading statements by people that have no idea what they are talking about should not be entertained. It is simply designed to tarnish the good name of the Company and also to scare the beneficiaries that have accepted the Vendor Financing by KPHL,”

Author: 
Cedric Patjole