Lekoil Nigeria has accused Lekoil (Cayman) Limited of working against the interest of shareholders, following the announcement of Lekoil Cayman’s entry into a convertible facility agreement (option agreement and the tripartite) with Savannah Energy Investments Limited, a wholly owned subsidiary of Savannah PLC.
While the announcement by Lekoil Limited does not affect Lekoil Nigeria or her assets, Lekoil Nigeria considers the Savannah deal to be corrupt and unlawful, alleging that the deal as announced, is in contravention of applicable Nigerian law, given that prior Ministerial consent is required and this can only be achieved with the express consent of and facilitation by Lekoil Nigeria.
Lekoil Nigeria equally holds that the Savannah deal is massively dilutive at 0.5p per share to shareholders and is destructive to shareholder value, insisting that the proposed dilution is subject to ongoing litigation and cannot stand until a judge decides. Interestingly, Lekoil Nigeria has offered shareholders a better deal with zero dilution to shareholders.
While Lekoil Nigeria will be taking immediate legal action to restrain any issuing of shares, she is also concerned at the level of misrepresentation being peddled by Lekoil (Cayman) Limited, noting that her subsidiary, Lekoil Oil and Gas Investments Limited, has fully repaid all existing loan facilities from Lekoil Limited to Lekoil Oil and Gas Investments Limited and is therefore not indebted in any way to Lekoil Limited. She firmly refutes any claims by Lekoil Limited to the contrary as false.
It will be recalled that Lekoil Nigeria had since December 2020, consistently drawn the attention of Shareholders to the bad faith and ill-intent of the current board of Lekoil Cayman and certain shareholders determined to take over the company.
In a statement released on AIM, Lekoil Nigeria alleges that “the entry into the Savannah CFA, the Option Agreement and the Tripartite Agreement further reveals the contempt with which the board holds shareholders”.
Ironically, even as the Lekoil Cayman board recommends that shareholders reject the Cash Offer from Lekoil Nigeria at 1.9p per Ordinary Share on the grounds that it undervalues the Ordinary Shares, she herself is issuing new Ordinary Shares to Savannah at an approximate 75% discount to the price offered by Lekoil Nigeria to Shareholders.
Lekoil Nigeria is reportedly considering a number of actions to combat the current corporate breach, including a restructuring of the company and requisition of an extraordinary shareholders meeting to remove the board in its entirety.
While Lekoil Nigeria is prepared to engage the Nigerian regulators to ensure Nigerian oil and gas assets are not appropriated in contravention of the laws of the Federal Republic of Nigeria, she will continue “to offer Shareholders liquidity or continuation of their investment in the Lekoil Nigeria assets without economic dilution via the Cash Offer and the Share Exchange Offer”.
