Nigeria News

NIGERIA: Japaul Oil Eyes Fresh Funds for Expansion

Japaul Oil & Maritime Services Plc has restated its plans to raise additional funds to expand its offshore business in Africa. Bloomberg yesterday quoted the Chief Executive Officer of Japaul, Mr. Paul Jegede, as saying the company is studying loans, bonds, stocks or a combination of all three to raise money after appointing a consulting firm a month ago.
 
The company, which operates in Nigeria, the United Arab Emirates and Oman, plans to buy ships and equipment to expand in “about 12 countries in Africa over the next five years,” Jegede told Bloomberg. According to him, Japaul is looking at nations with viable maritime and oil industries such as Angola, Equatorial Guinea and Ghana for the expansion. The company plans to expand in areas from dredging, offshore vessel chartering and marine equipment leasing, to oil and gas engineering, procurement and installation services.
 
“There is whole lot to be made in this industry if we have sufficient equipment. Producers need help prospecting, drilling, producing and selling oil and part of the money may be used for refinancing,” he said. Jegede explained that the company, which has started to import refined petroleum products for sale to Nigerian retail outlets, plans to restrict its upstream business, relating to production, to chartering ships for now rather than buying fields itself.
 
Speaking on the need for fresh capital injection last month in Lagos, Jegede said decision to borrow money from banks had led to payment of high interest charges, which affected company’s bottom and denied shareholders dividend. He declared that the worst was over for the company and that shareholders should look forward to an investment that would continue to do well and fetch them returns. He said the debt burden of the company would soon be over as the loans would be fully repaid in the next three years and the assets would become those of the company.
 
“There is a great future ahead of us. By the time we repaid the money, the assets will remain with us and the money we are using to repay the loans now will become shareholders’ money,” he said. According to him, with the expected N50 billion fresh capital and existing assets, Japaul would be sitting on an assets of about N80 billion, saying the income that will come from this will be enough to pay dividend continually.

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