- Category: Business and Economy
- Published on Friday, 31 December 2010 09:31
- Written by ThisDay
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Shareholders of African Petroleum (AP) Plc yesterday overwhelmingly approved the change of name of the company to Forte Oil Plc.
The meeting, which was held at the Civic Centre, witnessed a large turnout of shareholders despite the lull in economic activities in the country owing to the Christmas celebration. The proceedings were conducted by the company’s Chairman, Mr. Femi Otedola. According to him, "the brand, AP Plc is tired”.
He revealed that the new name was part of the strategic plans of the company to make a fresh start and do away with the past which had been enmeshed in all sorts of controversies.
The name change, which appeared under special business of the notice of annual general meeting, proposed that “the name of the company be and is hereby changed from African Petroleum Plc to Forte Oil Plc, that the memorandum of association of the company be altered by deleting African Petroleum Plc and substituting therefore ‘Forte Oil Plc’ wherever the context so admits”.
Otedola stated further that the company had rebounded from a loss situation to profitability, promising shareholders that at the next Annual General Meeting (AGM), the company would put smiles on their faces by paying dividends since the company’s fundamentals were strong and the future bright for the company.
Clearly upbeat, he declared that as things stood today, AP Plc was not owing any bank in Nigeria or abroad one penny. “This company is sound and strong, and can only grow stronger. We are determined to achieve that,” he declared. Continuing, he revealed: “We carried out a major restructuring and had to undertake the painful but necessary exercise of laying off of some staff.”
He stated that the year 2009 was a particularly difficult operational year for every company in Nigeria and the rest of the world owing largely to the global recession.
“Expectedly the oil and gas industry was not left out in the massive negative impact of the 2009 economic and socio-political environment. For instance, in the downstream sector of the Nigerian oil industry, the severe cut in local crude oil production and refining continued to create a supply gap which necessitated continuous importation of fuel by NNPC and marketers in line with government policy of fuel subsidy.
"However, even this initiative encountered problems caused by a combination of factors: the credit squeeze which made fuel importers unable to source for funds to import, official delays in the issuance of import allocation and the delay in payments to downstream operators under the Petroleum Support Fund (PSF). This eventually led to the cessation of importation by oil marketers. We therefore experienced months of lingering fuel scarcity. These issues were however resolved with the payment of all outstanding PSF claims and the subsequent introduction of a Sovereign Debt Note to provide security for private sector imports.”
According to him:"Another major event with significant economic implication was the massive reform that took place in the Nigerian banking industry.
“The widespread action involved the special audit of the twenty-four banks in the country on the basis of liquidity, capital adequacy and corporate governance.
"The exercise was concluded with an injection of funds worth N620 billion to ailing banks and safeguarded customers’ deposits; it improved their liquidity and prevented a banking crisis.
“The reform also created difficulties in gaining access to credit facilities for business operations.
“The liquidity squeeze and reluctance of banks to lend, resulting in increased inter-bank lending rates. Since we are highly dependent on credit financing to run our operations, sourcing funds and the high interest rates became major hurdles to scale throughout year 2009.”
Endorsing the name change, Dr. Farouk Umar stated that it was long overdue, adding that the company needed to move away from her past to chart a new course for a fresh beginning.
AP Plc had been enmeshed in series of controversies since 2001 when it was sold to Sadiq Petroleum which in turn sold its shares to Afribank Plc.
From change of ownership to management crisis, the company had suffered loss of confidence.
In 2009 financial year, the company declared a loss but has quickly risen from that to declare a second quarter 2010 unaudited result which showed over N794 million profit before tax.
Most of the shareholders who spoke expressed happiness at this piece of information that the company had put her loss situation behind and was moving quickly to profitability. The 2009 annual report and account was presented at the AGM and consequently adopted.
Chief Oyepeju, Chairman Shareholders Association in South-west, commended the change of name, stating that Forte from his dictionary means strength and excellence, and that the company given the benefit would definitely excel beyond the machinations of its enemies.
Alhaji Murktar Muktar praised the vision of the company and urged all who are not interested in the progress of the company to quit and let others run it instead of creating problems for the management.