Kumul Petroleum Holdings Limited Managing Director Wapu Sonk has blasted landowner representatives for issuing misleading statements regarding the proposed vendor financing.
He said the statement is completely misleading and doesn’t make sense at all.
“One has to appreciate that the financial modelling that goes behind something like this is far beyond any of these people that have put together.”
He said what the landowners have used was from a presentation he did and they have completely interpret it incorrectly.
He said there are motives behind the landowners’ misleading statements.
“I know it’s driven by other motives and there are a lot of under currents to this…otherwise, you just have to ask any competent financial person and they will tell you that the vendor finance offer that is being proposed by KPHL is the better option.
“They (landowners) don’t’ put any toea upfront and at this oil price climate, I will be very surprised if any Landowner group or Provincial Governments can raise enough financing to pay for the Kroton option.”
Sonk further reiterated that beside having money aside, the landowners have not been properly identified by the Department of Petroleum and Energy pending their land identification.
“So who will any competent bank or financier deal with?” Sonk questioned.
He said these are people (Landowners) with vested interest with other motives trying to derail what is a very good offer by KPHL.
Vendor Financing basically means KPHL will give the shares to the beneficiaries at no cost and will recoup the payment internally through the LNG revenue.
It is a form of lending in which a company lends money to be used by the borrower to buy the vendor's products or property.
Vendor finance is usually in the form of deferred loans from, or shares subscribed by, the vendor whereby the vendor often takes shares in the borrowing company.
“The terms we have offered will never be matched by any bank or financiers so either this people don’t understand what we are offering or they have other drivers other than getting the Landowners and Provincial Governments to exercise the option and close this matter out.”
Chairman of the landowners in the project areas of PDL 1 (Arua -Hiwa Block), PDL 8 (Block 1642 -Pureni), and PDL 9 (Humiya Block), Raymond Kuai claimed that the proposed Vendor Financing will create a huge debt burden and negligible returns.