Papua New Guinea government sells Oil Search stakeStaff Writer | September 22, 2017
The cash-strapped Papua New Guinea government has sold its stake in the prospecting company Oil Search.
Oil exploration Papua New Guinea borrowed nearly $1 billion from UBS
In 2014, the government borrowed nearly $1 billion from UBS bank to buy a 9.8 percent stake in the firm which holds the rights to PNG's largest undeveloped gas fields.
Reuters reports that after refinancing UBS and JP Morgan held 149 millions shares for the government as security but gradually sold them down to hedge the debt as the share price fell.
Had PNG paid back the loan the banks would have bought back the shares but instead they sold the remaining stake to extinguish the government's debt.
The decision by Peter O'Neill's government to take out the loan led to the sacking of then-finance minister Don Polye, who refused to approve it. ■