The Management of Prudent Energy and Services Limited (PESL) on Tuesday, rubbished the story making the rounds that it failed to pay Zenon Petroleum and Gas Limited a debt of $6 million.
The management, particularly condemned a petition and the publication of the said petition by Zenon purporting to wind up PESL, the parent company of Ignite, owners of Ardova Oil saying the move was not only illegal, but extremely malicious.
According to PESL management, “the Sale and Purchase Agreement between lgnite Investments and Commodities Limited (lgnite) and Zenon includes final payments graduated over a period to accommodate and, if need be, compensate for any liabilities which might be presented by third parties, but which may have been previously undisclosed by the Seller. This is standard practice all over the world in transactions of this nature and so it was in the sale of Forte Oil Plc (now Ardova Plc).
PESL in a statement released on Tuesday, said “Seller and Buyer were, not surprisingly, unable to agree on the above outcome after formal notifications.” According to them, “the matter was brought before an Arbitration Panel in accordance with the London Court of International Arbitration Rules as provided for in the Share Purchase Agreement.”
PESL said Zenon’s actions were illegal as “Ignite and Zenon together with its affiliates recently concluded the arbitration proceedings for the purposes of determining the amount due from Zenon to lgnite.” PESL said “The arbitrators have indicated that a decision will be made in the month of August 2022”, hence their surprise at Zenon’s petition.
Read full statement…
“The Management of Prudent Energy and Services Limited (PESL”) has been notified of news circulated in the media on 8 August 2022, alleging that a “charge” to wind-up PESL over an alleged inability to pay $6 million debt has been presented to the Federal High Court by Zenon Petroleum and Gas Limited (Zenon).
The story is misleading. The facts of the matter are as follows:
The Sale and Purchase Agreement between lgnite Investments and Commodities Limited (“lgnite) and Zenon includes final payments graduated over a period to accommodate and, if need be, compensate for any liabilities which might be presented by third parties, but which may have been previously undisclosed by the Seller. This is standard practice all over the world in transactions of this nature and so it was in the sale of Forte Oil Plc (now Ardova Plc).
Seller and Buyer were, not surprisingly, unable to agree on the above outcome after formal notifications. And the matter was brought before an Arbitration Panel in accordance with the London Court of International Arbitration Rules as provided for in the Share Purchase Agreement
Ignite and Zenon together with its affiliates recently concluded the arbitration proceedings for the purposes of determining the amount due from Zenon to lgnite. The arbitrators have indicated that a decision will be made in the month of August 2022.
PESL, the parent company of lgnite, provided a corporate guarantee to Zenon in respect of any obligations of Ignite to Zenon. The actual obligations of lgnite to Zenon or vice versa) can only really be determined after the arbitral award has been delivered.
Zenon presented a winding-up petition against PESL to enforce the corporate guarantee even though the arbitral award that will provide clarity on what may be due to either side is still pending. This petition has neither been argued nor ruled on by the court before which it has been presented.
(vi) To Zenon’s knowledge, the subject of Zenon’s Winding: Up petition and its entitlement to any sum from PESL is vigorously contested by PESL through a High Court suit commenced by PESL against Zenon on 21 July 2022 to prevent Zenon from frivolously enforcing the corporate guarantee until the arbitral award has been delivered.
(vii) Zenon is aware that the subject of its petition will be resolved by arbitration very soon but has nevertheless commenced winding-up proceedings against PESL, a move that obviously seeks to pre-empt the imminent decision of the arbitrators.
The de facto advertisement, in the form of media publications, of the Winding- Up Petition commenced by Zenon against PESL, when no court has authorised the advertisement of such Petition, is illegal and prejudicial and is prohibited by Rule (191) of the Companies Winding Up Rules 2001. PESL will file a complaint with the Nigerian Press Council against the perpetrators of the malicious, libelous, and illegal publications.
In the meantime, the Board and Management of PESL assure all our stakeholders that we run a sustainable business based on sound corporate governance principles and best ethical standards. We continue to penetrate robust cash flows that are in excess of our requirements to fulfil all commitments to counterparties.
Finally, we confirm that the matter with Zenon is being handled via the proper channels. We kindly request that you ignore the blatant and malicious falsehoods being circulated in the media.
Signed,
Management”
