Vincent Moses/Commentary on PNG NEWS Page
Facebook/30th March, 2014 12:04 PM
There was only one loan and that is UBS, and IPIC deal was not a loan. Papua New Guinea Government has sold our Oil Search shares to IPIC to raise $1.7b to fund our equity (19.6%) in the PNG LNG Project.
At the time Oil Search shares were only worth $5 and not worth the $1.7b we needed. So we sold them under a special share sale agreement on its future value being $8.55. What believed the share price will be worth upon completion of the LNG Project in Mar 2014.
To get IPIC to agree to this deal certain securities (collateral) were put in place IPBC SOE's to underwrite the difference between what the shares were worth at the time $5 and future prices of $8.55. The difference we still owed on the sale. This difference was executed under an exchangeable bond arrangement or asset swap that IPIC held on and PNG Govt would be required to pay interest on until the sale agreement expired in March 2014.