As part of its strategy for business expansion and increase its market share, A-Z Petroleum Products Limited of Nigeria, has signed a $80m dual tranche loan and credit facility with the African Export-Import Bank.
According to a statement issued on Sunday by Afreximbank’s spokesman Obi Emekekwue, the first tranche of the facility is structured as a $30m five-year term loan to finance the company’s expansion activities in Ghana, with the importation of a lubricant blending plant and a plastic making equipment as well as the construction of a 40-metric tonne tank farm.
While the second tranche, a $50m standby letter of credit facility, is for the importation of petroleum products under petroleum products supply contracts between A-Z Petroleum and approved sellers.
The statement quoted the President of Afreximbank, Jean-Louis Ekra, saying during the signing ceremony at the bank’s headquarters in Cairo, that the transaction demonstrated the institution’s continued commitment to championing the promotion of trade across Africa in line with its trade finance and development mandate.
Ekra said, “We are providing this facility in a bid to deepen and broaden our support to Nigeria, Ghana and the African petroleum sector.”
He also noted that since its creation, Afreximbank had always supported Nigerian companies and had been an active supporter of the government’s local content policy.
The Chairman, A-Z Petroleum Limited, Mr. Chika Okafor, said the transaction marked the beginning of a new relationship between the bank and the Chicason Group, of which A-Z Petroleum is a subsidiary, as it opened up enormous opportunities for the bank to work with the group.
Afreximbank is the arranger, agent, security trustee and issuing bank for the facility, while Diamond Bank Plc is the designated local administrative agent and risk participant.
A-Z Petroleum (Ghana) Limited is the corporate guarantor and Ace Audit & Expertise Nigeria Limited is the collateral manager.
According to the statement, the Chicason Group is an African indigenous conglomerate with operational presence in countries across the continent, including Nigeria, Ghana and Sierra Leone.
With a current work force of 5,000, expected to grow to 15,000 by 2015, the group’s operations include activities in the oil and gas, manufacturing, cement and real estate sectors.
