PNG KPHL lost K951.52mil from transactions related to UBS loan

 THE Papua New Guinea Kumul Petroleum Holdings Limited (KPHL) made a loss of AU$362.85 million (K951.52 million) from transactions relating to the acquisition of the Union Bank of Switzerland (UBS) K3 billion loan in 2014, an official says.

Managing director Wapu Sonk was giving evidence yesterday before a commission of inquiry looking into whether proper procedures had been followed in securing the loan to buy shares in Oil Search Ltd.

Wapu Sonk
Wapu Sonk 

Sonk gave details of the four transactions that took place in March 2014, December 2014, Feb 2016 and Sept 2017.

In March 2014, he said the State acquired 137 million Oil Search shares by a collar loan for AU$2,031.5 million and an additional 12.4 million shares via a corporate bridge loan for AU$335 million.

In December 2014, he said the State novated the collar loan and bridge loan to KPHL together with all rights to the underlying Oil Search shares.

He said KPHL raised AU$335 million and paid out the bridge loan.

In Feb 2016, he said when the first collar loan and new collar loan neared expiry and became due, KPHL rolled the two collar loans over by combining them in a single collar loan at a lower interest rate.

“It cost KPHL AU$97.35 million (upfront payments for prepaid interests and collar premium) plus costs and fees for various professional advisors at AU$1 million.”

In Sept 2017, a few months prior to the expiry of the single collar loan, the government permitted KPHL to dispose of the 137 million OS shares.

“Total proceeds from the sale of AU$1,137.66 million was realised, of which AU$1,102.57 million was used to pay out the single collar loan.

“KPHL received a net cash of AU$335 million which consisted of a refund of unused prepaid interests (AU$25.6 million) and a residual profit (AU$9.49 million) and costs to KPHL for various professional advisors at AU$1 million.”

Sonk will give more evidence on Thursday.

The National / Pacific Mining Watch

Next : PNG Government's Fiscal Policy Strategy in Shambles : Lelang

Previous Post Next Post