May 4, 2007 / 3:17 PM / in 11 years

Nigeria's Zenon buys African Petroleum stake

LAGOS, May 4 (Reuters) - Nigeria’s privately-held oil firm Zenon has acquired a 28.7 percent equity stake in rival African Petroleum (AP) Plc APET.LG for 17 billion naira ($133.28 million), a Zenon official said on Friday.

The shares were sold by state-run Nigerian National Petroleum Corp. (NNPC), which acquired them in a 10 billion naira debt swap in 2005.

“A deal was done yesterday after Zenon paid 17 billion naira and the shares crossed over to Zenon on the floor of the stock market today,” Zenon’s special projects consultant Femi Bakare told Reuters.

Zenon Petroleum and Gas Ltd is a big importer of refined products in Nigeria, which still relies on imports for its fuel needs despite being Africa’s top producer of crude oil. But its retail network is limited.

AP is one of the largest fuel marketers in Nigeria, but its fortunes have declined since the government sold a 30 percent stake in 2001.

Bakare said Zenon had the financial muscle and managerial capability to turn the company around.

Zenon, which also has interests in shipping, secured a $1.5 billion loan from 10 Nigerian banks in March to expand its business.

Traders said the acquisition will make Nigeria’s downstream oil business more competitive because Zenon will probably invest in hundreds of AP outlets across the country.

Nigeria’s fuel market, worth more than $2 billion annually, is dominated by a handful of multinational and local retailers including NNPC.

The government sold its 30 percent stake in AP to Sadiq Petroleum, but Sadiq decided to sell the stake to a unit of Afribank Plc AFRB.LG after accusing the privatisation agency of concealing AP debts worth 26 billion naira.

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