Zenon Petroleum & Gas Limited, an oil marketing company in Nigeria has served a Winding Up petition against Prudent Energy and Services Limited over the inability of the latter to repay a debt of $ 6 million.
Prudent Energy & Services through its entity, Ignite Investments and Commodities Limited owns 74% of Ardova Petroleum a company listed on the Nigerian Exchange.
Billionaire investor Alhaji AbdulWasiu Sowami is the Chief Executive Officer of Prudent Energy & Services and the chairman of Ardova Petroleum.
According to information shared with Nairametrics, a winding up petition to wind up Prudent Energy and Services Limited to has been presented at the Federal High Court, Lagos in Suit No. FHC/L/CP/1450/2022 on the grounds of the inability of Prudent Energy and Services Limited to pay the debt of $6 million.
Background of the debt
Our sources suggest the debt is the balance of the purchase consideration paid for the acquisition of Forte Oil in 2019 from Femi Otedola’s Zenon Petroleum & Gas Ltd.
“The debt is alleged to have arisen from the sale conducted in 2018 where Zenon Petroleum & Gas Limited and its affiliates sold 74.02% of the issued share capital of Forte Oil Plc. (now Ardova Plc.) to Alhaji AbdulWasiu Sowami and Ignite Investment & Commodities Limited. As security for the deferred consideration for the sale of the shares, Prudent Energy and Services Limited and its Chief Executive Officer, Alhaji AbdulWasiu Sowami provided a guarantee in favour of Zenon Petroleum & Gas Limited and its affiliates for the prompt payment of the deferred consideration as at when due.”
The deal was valued at about $200 million in 2019 when the transaction was consummated. Apparently, the agreement allowed for the payment to be made in tranches, and $6 million appears to have fallen due.
Our sources confirm that Zenon Petroleum alleged in its petition that the sum of $6 million is “part of the deferred consideration” which “became due on 18 June 2022” but is yet to be paid “despite the demand letters served on Prudent Energy and Services Limited and its CEO, Alhaji Sowami.”
What this means
Nairametrics analysis of the petition suggests Zenon is seeking a winding up of Prudent Energy which will enable it to seize control of Ignite’s shareholding in Ardova Plc.
- Prudent Energy’s shareholding in Ardova is valued at about N12.6 billion. Ardova currently has a market capitalization of N16.9 billion.
- At a black market exchange rate of N600/$1, the $6 million is about N3.6 billion about 21.3% of the total market capitalization of Ardova.
- Ardova share price has also failed to reclaim the share price highs associated with Forte Oil (before it was sold).
- Meanwhile, Ardova also recently acquired Enyo Retail and Supply, a downstream company.
Latest on Ardova
Nigerian Exchange Limited (NGX) lifted the suspension placed on trading in the shares of Ardova Plc.
- The Exchange had earlier suspended nine companies including Ardova from the Nigerian Exchange Limited (NGX) on Friday, July 1, 2022, for failing to file their Audited Financial Statements for the year ended 31 December 2021.
- Ardova Plc recently announced the release of its 2021 Audited Financial Statements and Q1 2022 Unaudited Financial Results.
- The company reported a loss of N3.8 billion for the year ended December 2021 its first loss since it was acquired by Prudent Energy.
Being a publicly quoted company, Nairametrics expects Ardova to respond to these allegations in the coming days.
…this is a developing story.
