Femi Otedola’s Zenon Petroleum takes Ardova to court over $6-million debt.
Femi Otedola owns Zenon Petroleum and Gas Limited, an oil marketing company that has filed a winding-up petition against Prudent Energy and Services Limited, the majority shareholder in Ardova Plc, over a $6-million debt.
Three years ago, Femi Otedola who owned Forte Oil (now Ardova) sold the company’s 74.02-percent majority equity stake to Prudent Energy and Services Limited, an oil firm owned by Nigerian energy mogul Abdulwasiu Sowami.
The purchase agreement was signed in 2019 and valued at $200 million but it now seems Prudent Energy has only paid $174 million, $6 million short of the agreed $200 million buy-off.
Zenon Petroleum has therefore filed a winding-up petition against Prudent Energy with the Federal High Court in Lagos, alleging that the Sowami-led company was unable to pay a $6-million debt that represented the remaining purchase consideration for the stake in Forte Oil.
“The debt is alleged to have arisen from a 2018 sale in which Zenon Petroleum & Gas Limited and its affiliates sold 74.02 percent of Forte Oil Plc’s issued share capital to Abdul Wasiu Sowami and Ignite Investment and Commodities Limited,” According to a court document statement by Zenon Petroleum as reported by billionaires.Africa.
Zenon Petroleum has a guarantee for the prompt payment of the debt and served Prudent Energy with the winding-up petition more than a month after the deferred consideration, which was due on June 18. However, Zenon is yet to be paid despite demand letters sent to Sowami.
The winding-up petition adds to the pressures on Ardova and its majority owner, as shares in the company have dropped significantly from an average price of N23.6 ($0.055) per share in 2019 to N13 ($0.0305) per share at the time of writing this report.
Ardova reported a loss of N3.8 billion ($8.93 million) for the 2021 fiscal year, its first since being acquired by Prudent Energy.
Meanwhile, Otedola has invested a portion of the $200 million in his power-generation company Geregu Power Plc and is seeking payment of the $6-million deferred consideration.
His power-generation company completed an N40-billion ($96.3 million) unsecured corporate bond issuance nearly a week ago to expand infrastructure and capacity through the strategic acquisition of power generation plants in the sector.
The $96.3-million unsecured corporate bond is the largest corporate bond issuance in Nigeria’s power sector. It is also the first installment of Geregu Power’s N100-billion ($240.5 million) bond issuance program, which aims to strengthen the company’s capital structure and support its strategic expansion plans.