I was not involved in loan process: Ex-chairman

A FORMER chairman of the Kumul Petroleum Holdings Ltd (KPHL) says he was not involved in the decision to sell Oil Search Ltd shares or the timing of the sale.
Frank Kramer was chairman of the National Petroleum Company of PNG (NPCP Kroton), now the KPHL, from 2013 to 2017.
He told a commission of inquiry looking into the State’s K3 billion loan from the Union Bank of Switzerland in 2014, that he was aware that the NPCP was a party to the PNG LNG gas agreement.
“I knew that there were large and complex financing structures in place for that project,” he said.
“The funding requirements for the State’s participation in the development of the PNG LNG project gas development came from the International Petroleum Investment Company (IPIC) which raised US$1.081 billion (exchangeable bond).”
He said the entry into the exchangeable bond deal was done before he joined NPCP.
“Prior to 2014, I had little to no knowledge of, or involvement in, managing repayments made in relation to the exchangeable bond,” he said.
It was managed by the IPIC which was then the major shareholder in KPHL and NPCP, he said.
He became aware of the terms of the refinancing of the exchangeable bond when Cabinet directed the NPCP to negotiate with the IPIC to refinance the loan and extend the maturity date.
He was informed in a letter around Feb 3, 2014, that the UBS had been appointed the financial adviser, underwriter and arranger of the financing package “to execute a refinancing of the exchangeable bond”.
On Feb 14, 2014, he received an email from KPHL managing director Wapu Sonk that a mandatory exchange notice had been received from IPIC that it was keeping its Oil Search shares.
He said it was a welcome news for the NPCP.