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Report: NNPC seeks $2bn oil-backed loan to finance operation

Report: NNPC seeks new oil-backed loan to finance operation Report: NNPC seeks new oil-backed loan to finance operation

Mele Kyari, group chief executive officer (GCEO) of Nigerian National Petroleum Company (NNPC) Limited, says talks are ongoing for a new oil-backed loan to finance operations and allow investment in its business.

In a report by Reuters on Tuesday, Kyari said NNPC wants a loan against 30,000-35,000 barrels per day (bpd) of crude production but declined to say how much money it sought.

He said the cash raised would be used for all of NNPC’s business activities, including supporting production growth.

“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari said.

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“It will be a syndication with critical but regular partners who have been in business with our company to forward the cash.”

Kyari added that he expects to conclude the deal in the next two months.

According to the report, two sources familiar with the situation told Reuters that NNPC aims to raise at least $2 billion.

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The report said the company’s debts to gasoline suppliers have doubled in the last four months to hit $6 billion.

NNPC already has a $3.3 billion oil-backed loan through Afreximbank, but five sources, according to Reuters, said the company’s lack of cash had been aggravated by rising fuel subsidy costs, and that the new loan would help it to pay them.

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