NNPC revives long-delayed IPO, shops for advisers - Businessday NG (2025)

The Nigerian National Petroleum Company Limited (NNPC Ltd.) is reviving plans for an Initial Public Offering (IPO), signalling a renewed determination to tap private capital.

This latest push for a listing comes after two previous attempts in 2018 and 2023, which ultimately did not materialise.

Olugbenga Oluwaniyi, the company’s Chief Finance and Investor Relations Officer (CFIO), disclosed this at a consultative meeting with partners in Abuja, on Thursday.

He said NNPC Ltd was currently engaging with prospective partners in an exercise tagged, “NNPC Ltd. IPO Beauty Parade” in line with capital market regulations before the commencement of the Initial Public Offer (IPO).

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According to Oluwaniyi, the aim of the IPO Beauty Parade is to assess potential partners and determine in what ways they could be of support to the company.

He listed the areas of partnership required to include: Investor Relations, IPO Readiness Advisers, and Investment Bank Partners.

An IPO is a public offering in which shares of a company are sold to institutional investors.

“The company with the best offer in terms of project partnership would be selected for each of the three categories,” Oluwaniyi said.

This isn’t the first time the idea of an NNPC IPO has been floated.

In 2018, under a different management structure of Emmanuel Kachikwu, petroleum resources minister of state and managing director of the NNPC, there were preliminary discussions and some preparations made towards a potential listing.

However, that effort did not progress to a full-fledged IPO for various reasons, including market conditions and internal restructuring challenges at the time.

NNPC Ltd became a commercial venture company on July 19, 2022, after the Petroleum Industry Bill became law the previous year. Mele Kyari, Group CEO of NNPC, had previously said the company would be ready to launch an IPO by mid-year in 2023 during a transition ceremony.

The NNPC was initially expected to be ready for an IPO by the end of Q2 2023, according to its quarterly report, but the listing did not materialise.

The corporation is yet to publish its audited accounts for 2024 and its books require thorough cleaning after years of subsidising petrol and intervening in various sectors of the economy.

An initial public offering (IPO) is typically a long and complex process for any company. However, for NNPC Ltd., which only published its first audited accounts in 2023 after four decades of operation and has since struggled with financial transparency, going public presents even greater challenges, raising concerns about governance, investor confidence, and regulatory scrutiny.

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Analysts say NNPC Ltd must strengthen its financial position to attract investors, which requires maintaining positive cash flow, reducing its debt-to-equity ratio, and ensuring consistent revenue growth.

The state-owned oil firm would also need to clean up its image and improve on corporate governance practices. Having long operated like a regulator, the NNPC Ltd would need to convince its partners and would-be investors that it would shun its cavalier approach when dealing with them and pay its own share of costs in oil development plans.

The PIA provides for the NNPC Ltd to list its shares in the capital market in line with the provisions of the Company and Allied Matters Act (CAMA) 1990.