Umar Ajiya, the Chief Financial Officer of the Nigerian National Petroleum Company (NNPC) Limited, has indicated that the organization is open to the idea of asset sales as a means to enhance profit margins and secure greater returns in the near term.
Ajiya shared this insight during an interview regarding the
company's 2023 audited financial statement.
He emphasized that NNPC is focused not only on maximizing
the use of certain assets but is also evaluating the potential sale of those
that cannot be effectively optimized for improved returns.
“You have a company that is literally just one year old. We
started first of July, 2022. 2023 marks our second year of operation.
“We are going to sweat the assets by bringing in partners to
sweat them in. We will also sell those assets that we think we cannot sweat
ourselves.
“That way, we will rebalance the balance sheet in such a way
that the assets are maxed out. We expect the rate of returns to be achieved,”
Umar Ajiya said.
NNPC has announced a remarkable 28% rise in profit,
amounting to N3.2 trillion, and possesses total assets estimated at around
N246.8 trillion, which surpasses the entire Gross Domestic Product (GDP) of
Nigeria.
Ajiya further indicated that the oil company is ready for
public offerings, depending on the willingness of shareholders to invest.
He pointed out that the Petroleum Industry Act (PIA)
suggests a financial history of two to three years to reassure investors of the
national energy giant's profitable trajectory.
He stressed that NNPC has already proven its profitability
in the initial two years, noting that shareholders are keen to witness the
company’s robust performance once it transitions into a publicly traded entity.
“To go to the public is basically a shareholder’s decision.
We are almost there in the sense that we have at least two or three years of
financial history to demonstrate to the investors that the company is on a
profitable trajectory. We’ve demonstrated that for the first two years.
“Hopefully, the shareholders will decide how much to sell
down and unwind. It’s really the shareholders’ call.
“The shareholders are now averse to selling down. They are eager to see us deliver with some strong performance and they can ask us to enter the market at the appropriate time,” the CFO added.