​KPHL sells OSL shares, loses K760m

The State has lost over K760 million (US$254 million) after the Kumul Petroleum Holdings Limited (KPHL) Board approved the sale of the state's shares in Oil Search.

KPHL made the official announcement today after the decision was made yesterday.

Chairman Moi Avei said this was a commercial decision by the board that was in the best interest of KPHL.

Managing Director Wapu Sonk said the decision to sell the shares had been looked at over the last two years but had been waiting the right time.

He said with the current pricing, the board decided that it was time to sell.

The MD said the shares were sold at $6.70, a dollar thirty short of the purchase price of $8.

Sonk said the loss will not have an impact on its balance sheet and they have been prudent with the way they have handled it.

The divestment of shares means PNG loses its 10 percent stake in Oil Search after A$1.239 billion UBS loan was taken to finance it.

The A$1.239 billion loan comprises two components – a bridge loan of A$335 million with an interest rate of 5.5 percent per annum and a collar loan of A$904 million at an interest rate of 4.95 percent.

KPHL stated that the sale does not affect its relationship with Oil Search and they will continue to partner with the company in other petroleum and gas projects in the country.

(Loop file pic)

Cedric Patjole
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