31 December 2010

Tosin Fodeke

 

FOLLOWING approval by shareholders of African Petroleum Plc (AP), to change the of name of the company to Forte Oil Plc, the company’s Chairman, Femi Otedola has revealed that plans to make a fresh start fueled the company’s decision.

 

According to Otedola, the new name was part of the strategic plans of the company to make a fresh start and do away with the past, which had been enmeshed in all sorts of controversies.

 

Said he, “AP Plc is tired, we carried out a major restructuring and had to undertake the painful but necessary exercise of laying off some staff.”

 

Speaking at the company’s annual general meeting recently, Otedola stated further that the company has rebounded from a loss situation to profitability, promising shareholders that at the next AGM, the company will put smiles on their faces by paying dividends since the company’s fundamentals were strong and the future bright.

 

He disclosed that as things stand presently, AP Plc did not owe any bank in Nigeria.

 

He stated that the year 2009 was a particularly difficult operational year for every company in Nigeria and the rest of the world owing largely to the global recession.

 

“For instance, in the downstream sector of the Nigerian oil industry, the severe cut in local crude oil production and refining continued to create a supply gap which necessitated continuous importation of fuel.

 

However, even this initiative encountered problems caused by a combination of factors: The credit squeeze which made fuel importers unable to source for funds to import products; official delays in the issuance of import allocation and the delay in payments to downstream operators under the Petroleum Support Fund (PSF). This eventually led to the cessation of importation by oil marketers.

 

We therefore experienced months of lingering fuel scarcity. These issues were, however, resolved with the payment of all outstanding PSF claims and the subsequent introduction of a Sovereign Guarantee Scheme to provide security for private sector imports,” Otedola stated.

 

He added that the liquidity squeeze and reluctance of banks to lend, resulting in increased inter-bank lending rates, also created difficult in gaining access to credit facilities for business operations.

 

“Since we are highly dependent on credit financing to run our operations, sourcing funds and the high interest rates became major hurdles to scale throughout year 2009.

 

In 2009 financial year, the company declared a loss of over N9 billion but has quickly risen from that to declare a second quarter 2010 unaudited result, which showed over N500 million profit. Most of the shareholders who spoke expressed happiness at this piece of information that the company has put her loss situation behind and is moving quickly to profitability. The 2009 annual report and account was presented at the AGM and consequently adopted.

 

Shareholders also directed that 102,231,137 million units of shares allotted but not paid for during the 2008 public offer and right issue be forfeited and sold and monies put in the coffers of the company.

 

(Source: Guardian)