PNG-Abu Dhabi fund deal imminent

Sydney: Papua New Guinea is close to reaching a deal with Abu Dhabi fund International Petroleum Investment Company (IPIC) to raise A$1.68 billion (Dh4.04 billion), through exchangeable bonds for Oil Search Ltd to fund its stake in an $11 billion LNG project.

"Our financial contribution... we have negotiated very successfully with a sovereign fund, IPIC. We are raising A$1.68 billion," Prime Minister Sir Michael Somare said.

"We have fixed [an exchangeable bond] rate that is agreeable by both the IPIC and ourselves," he said, declining to give the exact price, but saying that A$8 was a fair price for the bonds to be swapped for Oil Search shares.

Local PNG media reported that the deal will see PNG's state resources company, the Independent Public Business Corporation (IPBC), issue exchangeable bonds which could be transferred into Oil Search shares at a price of A$8.55. Oil Search shares were down 5.8 per cent at A$4.56 on Friday.

PNG holds 17.5 per cent of Oil Search.

Somare said the deal would be signed this week. Somare's son, the minister for public enterprises, confirmed the deal but said it would be "concluded shortly".