Shareholders of Nipco Plc have approved guarantee for the $301 million acquisition of 60 per cent majority equity stake in Mobil Oil Nigeria by Nipco Investments Limited, a wholly owned subsidiary of Nipco Plc.
At an extraordinary general meeting in Abuja, shareholders authorized the board of directors of the company to stand as a surety and guarantor for the acquisition.
Shareholders authorised the board to stand as surety and guarantor for Nipco Investments Limited and also approved the guaranty dated September 26, 2016 given by Nipco for the benefit of ExxonMobil Corporation, USA in connection with the acquisition by Nipco Investments Limited.
Nipco had agreed to pay $301 million for the acquisition of ExxonMobil Oil Corporation’s 60 per cent majority equity stake in Mobil Oil Nigeria Plc. The total consideration of $301 million, which is subject to price adjustments for dividends and other factors, is equivalent to N91.88 billion at current official exchange rate of N305.25 per Dollar.
Under the deal, ExxonMobil will sell its majority equity stake of 60 per cent to Nipco Investments Limited; a wholly-owned subsidiary of Nipco. ExxonMobil will transfer its total shareholding of 216.36 million ordinary shares of 50 kobo each to Nipco Investments Limited for the consideration of $301 million.
One of the shareholders who set the tone for the generally positive comments on the deal, Alhaji Sanni Yau said the acquisition was a demonstration of the capacity of Nipco and its commitments to the Nigerian economy.
According to him, the fact that Nipco had in the last 12 years focused exclusively on the downstream sector will give it necessary confidence and wherewithal to effectively reposition Mobil Oil Nigeria as an industry leader within the shortest possible time.
He noted that the confidence reposed in Nipco to put Mobil Oil back as an industry has started to manifest, citing the share price appreciation of more than 55 per cent since the official announcement of the deal by Mobil Oil Nigeria at the Nigerian Stock Exchange (NSE) .
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