UBA’s $200m Lifeline Excites Oil Industry

UBA
Follow Us On Social Media
  •  
  • 1
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
    1
    Share

UBAThe fresh impetus is coming to the Nigerian petroleum industry, courtesy a $200million facility from Africa’s leading pan-African financial services group, the United Bank for Africa Plc, UBA.

The bank has acted as an Initial Mandated Lead Arranger with a consortium of Nigerian commercial and international banks in a $1.5 Billion Pre-Export Finance Facility for Eagle Export Funding Limited, to enable the forward sale of crude by the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).

According to a statement from the bank, in specific terms, UBA is providing $200 million (Naira equivalent) towards the crude oil sale, to support investment growth and liquidity requirements. The forward sale will provide much-needed capital for investment in NNPC’s production capacity, which is of strategic importance to the Nigerian economy and is indeed the country’s leading source of foreign exchange earnings.

The statement further explained that ‘UBA’s position as Mandated Lead Arranger recognizes the Group’s strength in structuring and deploying financing to the oil and gas sector, and the depth and liquidity of the Group’s balance sheet.’

To its credit, UBA has a strong track record in the resources sector across Africa, having facilitated similar oil prepayment deals with the NNPC.

Before now, the bank had been responsible for the EUR 240m Revolving Crude Oil Financing Facility for the Société Africaine de Raffinage, and in Congo Brazzaville, it had co-funded the $250m crude oil prepayment facility for Orion Oil Limited.

READ  Nigerian Banks Sacked 2,929 Workers In Three Months

Other participants in the Eagle Export Funding Limited deal are Standard Chartered Bank, Afrexim Bank, Union Bank, and two oil trading companies, Vitol and Matrix.

Speaking on the import of the transaction, UBA Group Chairman, Tony O. Elumelu said: ‘This has been one of the most economically challenging years that Nigeria has witnessed. With the sharp drop in the price of oil and the ensuing hardship that followed the onset of the Covid-19 pandemic, the private sector must come together and contribute meaningfully to the economy.

‘This facility is clear evidence of this – UBA is providing an investment that will significantly improve Nigeria’s production capacity and in doing so also demonstrating the strength, depth, and sophistication of our commercial banking capability. I believe that together, working with governments, we can create more jobs and more wealth for people, not only in Nigeria but across Africa,’ the astute banker and entrepreneur affirmed

The United Bank for Africa is one of the largest employers in Africa’s financial sector, with over 20,000 employees and serving over 20 million customers. The financial service player operates in 20 African countries as well as the United Kingdom, the United States of America and France, providing retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.

 


Follow Us On Social Media
  •  
  • 1
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
    1
    Share
  •  
    1
    Share
  •  
  • 1
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Related posts