Why High Court extended time for Oando Plc to file its scheme of arrangement document

The Federal High Court Lagos Division on October 18, 2022, extended the time Oando PLC has to file its Scheme of Arrangement document following a petition filed on March 25, 2021, at the court by fourteen (14) shareholders of Oando, holding a total of 299,257,869 shares.

According to disclosure signed by Ayotola Jagun, chief compliance officer, the petition was filed for and on behalf of Oando’s minority shareholders led by Venus Construction Company Limited and is brought under sections 353, 354, and 355 of the Companies and Allied Matters Act 2020.

While Ocean and Oil Development Partners Limited and Oando are listed as 1st and 2nd respondent, the petitioners requested that the court orders the buyout of their entire shareholding either by OODP or Oando.

OODP, in response to the petition, filed an answer and a cross-petition dated 15th March 2022 stating that it is willing and ready to buy out the minority shareholders via a members’ scheme of arrangement to Oando for presentation to its shareholders at a general meeting, to place itself in a position to inject further capital into Oando and facilitate the reorganization of the company’s capital structure.

Oando also filed an answer to the petition. It did not challenge the prayers of the petitioners, but clarified misconceptions contained in the petition concerning the management of its affairs.

Details of proceedings

• The Court, in its June 7, 2022 ruling, had ordered that Oando shall prepare within 30 days the Scheme Document for the purchase of all the minority shareholders’ shares in Oando Plc for submission to the Securities and Exchange Commission (SEC) and/or the NGX as may be necessary.
• It also gave an order directing Oando to convene within 120 days, a meeting of the holders of its fully paid ordinary shares or their duly authorized proxies/personal representatives (where it becomes impracticable for any of the holders to attend or vote at a meeting) to consider, and if thought appropriate, approve (with or without modifications) a proposed scheme of arrangement by OODP for the purchase of all the minority shareholders’ shares in Oando amongst other things.
• Further to Oando’s inability to meet the initial timeline the court gave, the company applied for an extension of time to comply with the court orders.
• On October 18, 2022, the court granted an order granting a further extension of 90 days or such time as Oando may deem necessary within which Oando may comply with the court order to prepare the Scheme Document for submission to the SEC and NGX for the acquisition of the shares of all minority shareholders by OODP.
• The court also gave an order extending the time by 60 days or such time as Oando may deem necessary commencing from the date of preparation and submission of the Scheme Document within which Oando may comply with the order of the court made on June 7, 2022, to convene a meeting of holders of its fully paid Ordinary Shares to consider and if thought appropriate, approve a proposed Scheme of Arrangement by the Cross Petitioner/Respondent.
• The Court adjourned the Petition to January 26, 2023, for the report of compliance. Against this backdrop and within the court’s specified timeline, the company shall develop for submission to SEC and NGX, the Scheme Document for OODP’s purchase of all the Company’s minority shareholders.