The shares of Nigerian-based oil company, Lekoil Limited, has been suspended from trading at the London Stock Exchange’s ‘AIM’. This came after the company revealed problems with an early January loan from the Qatari Investment Authority (QIA).
The QIA, Qatar’s sovereign wealth investment fund, has stakes in numerous FTSE-listed mining ventures, including owning 3.3% of Yorkshire polyhalite mine operator Sirius Minerals (LSE:SXX).
Nairametrics had earlier reported that Lekoil Limited secured $184 million funding to finance the drilling and all initial development plans on the Ogo field within Oil Prospecting Lease, OPL 310. The company, which operates in Nigeria and other West African countries, had announced that the credit facility was provided by QIA.
So, what happened? Recent development has shown that the origin of the loan is questionable after the Qatar investors questioned the validity of the funds, which Lekoil had secured after being reportedly introduced to QIA by consultant firm, Seawave Invest Limited.
Lekoil was said to have paid $600,000 to Seawave Invest Limited for initiating the introduction to individuals supposedly QIA representatives and securing the financial deal from the Qatar investment company. However, after the loan announcement, representatives of QIA approached Lekoil to clarify the loan approval.
Drastic action taken: The oil company released a statement informing its shareholders and the public today, Monday, about the recent development. According to the statement seen by Nairametrics, Lekoil Limited requested to have its shares on LSE AIM suspended as the company moves to unravel and solve the issue.
[READ MORE: Lekoil secures $11.5 million facility)
The statement read, “Lekoil’s advisers were approached yesterday by representatives of the Qatari Investment Authority (the “QIA”) questioning the validity of the loan agreement announced on 2 January 2020 (the “Facility Agreement”).
“Lekoil is urgently seeking to establish, alongside its legal counsel and Nominated Adviser, the full facts of this matter, and pending this clarification, the Company has requested that its ordinary shares be suspended from trading on AIM with immediate effect, and this took place at 7.37 a.m. today.
“Lekoil confirms that its financial exposure associated with the Facility Agreement currently stands at approximately US$600,000, being the amounts paid in good faith as an initial arrangement fee to Seawave Invest Limited. The firm did that in its capacity as introducer to those purporting to be the QIA and lead adviser to the Company in relation to the Facility Agreement, and associated legal fees. There have been no monies paid to the presumed counterparty.”