Oil and Gas downstream company, Ardova Plc has denied it is facing a winding up charge in respect of the debt owed to Zenon Petroleum and Gas Limited (Zenon) by Ignite Investments and Commodities Limited (Ignite).
Nairametrics reported on Monday that Zenon Ltd has filed 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.
Ardova’s Position
Ardova stated that there are no claims against Ardova Plc as an entity and that there are no winding-up petitions threatened or filed against it.
- They also claim that they (Ardova Plc) are not a party to any of the proceedings and the proceedings neither affect Ardova Plc’s rights nor create any liability for Ardova Plc in any way.
- The company also stated that the transaction was between Zenon and Ignite and that they are not a party to any of the proceedings and the proceedings neither affect Ardova Plc’s rights nor create any liability for Ardova Plc in any way.
Excerpts of the Press release
Attention of the Management of Ardova Plc (Ardova or the Company) has been drawn to news circulated in various media publications on 8 August 2022, which seem to include Ardova Plc in a report of a “charge” to wind-up Prudent Energy & Services Limited (PESL) over an alleged inability to pay $6 million debt presented to the Federal High Court by Zenon Petroleum and Gas Limited (Zenon).
Ardova Plc hereby states that the story is misleading and presents the facts of the matter as follows:
(i) The issues relate to the claims and warranties under the Share Purchase Agreement (“SPA”) between Ignite Investments and Commodities Limited (“Ignite”) and Zenon together with its affiliates for the acquisition of shares in Forte Oil Plc (now Ardova Plc).
(ii) There are no claims against Ardova Plc as an entity. There are no winding-up petitions threatened or filed against Ardova Plc in respect of these issues or any other issue.
(iii) For the avoidance of doubt, Ardova Plc is not a party to any of the proceedings and the proceedings neither affect Ardova Plc’s rights nor create any liability for Ardova Plc in any way. However, the Company has faith in the dispute resolution process and believe it will culminate in a just resolution of the issues.
Ardova wants to avoid being drawn into a media spectacle and consider it important to clarify that this report relates to a dispute between former shareholders and a current shareholder and has nothing to do with Ardova Plc as a separate entity
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.”