Home » United Bank for Africa did not fund OML-17 acquisition: Nigerian mogul Tony Elumelu

United Bank for Africa did not fund OML-17 acquisition: Nigerian mogul Tony Elumelu

by Ishioma Emi

Nigerian multimillionaire Tony Elumelu has stated that the United Bank for Africa (UBA) did not fund the acquisition of Oil Mining License 17 (OML-17). The businessman and philanthropist addressed the subject during an interview with Arise TV on May 5, quelling rumors that Heirs Holding and Transcorp had acquired the license.

This follows earlier reports that Elumelu’s family-owned investment company Heirs Holding bought a 45-percent stake in partnership with Transnational Corp Plc in an onshore oilfield as part of a deal that included $1.1 billion in financing from a consortium of global and regional banks and investors. 

However, the Cable later reported that UBA did not participate in the funding process to acquire the license. A consortium of banks, including AfreximBank, Absa in South Africa, Fidelity Bank and other international entities, provided the funding. 

The license acquisition portrays the organization’s commitment to the energy sector. The field has a production capacity of 27,000 barrels of oil per day and an estimated reserve of 1.2 billion barrels of oil equivalent. 

Although the acquisition of such a high-quality asset is a strong statement of confidence in Nigeria’s economic prospects, a clarification from the businessman was needed. 

When UBA declared its final dividend of N0.52 (52 kobo) per N0.50 (50 kobo) for 2020, investors with substantial stakes in the leading pan-African bank frowned at the dividend declaration because they expected more.

Analysts, however, believed the bank rewarded investors with an impressive dividend for the period ending Dec. 31, 2020, as the bank’s profit in local currency grew by 18.5 percent.

On the Nigerian Stock Exchange on May 7, UBA shares were trading at N7.2 per share. At this price, UBA’s market capitalization is N246 billion ($599 million ).

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