Kumul Petroleum Holdings Limited says Kroton, the special purpose vehicle holding the States shares in the PNG LNG Project has not been mortgaged against the UBS Loan.
KPHL Managing Director, Wapu Sonk, said this during the signing of ‘Unit Application Forms’ by Beneficiary Group PDL 4- Gobe to exercise the vendor finance option to acquire Kroton Equity shares in the PNG LNG Project.
He said there were rumours and misconceptions that Kroton was mortgaged against the UBS Loan and that the States shares in Kroton, which some of the Beneficiary Groups have acquired through the Kroton Option, had a lot of liability. This is head was not true.
“A lot of people are saying Kroton was mortgaged (and) Kroton has a lot of liabilities. Kroton is a special purpose vehicle. We cannot do business outside of PNG LNG specific activities. So you can’t do business or borrow against it.
“This is a special purposes vehicle. So its protected by the project, by the financiers, that gave us the $US19 billion (K57 billion) to build the project. There’s a lot of talk going around that what we are offering has a lot of liabilities. The only liability that sits inside the Kroton Company is the borrowing, 70 per cent borrowing from the financiers for the project. That other 30 per cent was put in by the Government,” Sonk said.
In relation to the acquiring of shares, he said the beneficiary groups where coming in at a good time when the price of oil was slowly recovering.
He said from 2014 to 2016 KPHL has been paying back the debt to financiers which has been reduced.
“So where you are entering now is a good place. That asset value is going up. It sometimes goes up and down with oil price because its an LNG project asset but it does not completely come down it maintains its value. When the oil price comes up it comes up so the value grows.
“When we did the valuation and advised the Government because government wanted to give a discount, it was at a price when it was low (but) now it has come up. So what you are entering into now is at a different value. It changed and it has gone up. So it’s an attractive asset that you are buying shares off. So you should be congratulated for actually taking up the option,” said Sonk.