BY Henry Uche
Lekoil Nigeria Limited has filed a petition in the Grand Court of Cayman Island Court to request a its “Just and Equitable” winding up to avert value loss by shareholders of the AIM-Listed company.
The petition was filed by Lekoil Founder/ Chief Executive Officer (CEO) of Lekoil Nigeria Limited, Mr. Olalekan Akinyanmi.
A statement made available to Daily Sun revealed that the new turn of events was disclosed by the Chairman of Lekoil Nigeria Limited, Mrs. Aisha Muhammed-Oyebode in a letter she wrote to shareholders of Lekoil Cayman, where she called the attention of shareholders to the petition presented by the CEO of Lekoil Nigeria Limited to wind up Lekoil Limited (the Company).
In the letter she said: “I write to you today to address any concern that you may have regarding this petition and assure you that that it is not the intention of Mr. Akinyanmi nor Lekoil Nigeria to compromise the integrity of your investment in the Company.
“Recall that in December 2020, I wrote to you following the requisition of an extraordinary general meeting by Metallon Corporation. In my letter I foreshadowed the efforts to take over your Company through a back door by Metallon Corporation and various other active institutional shareholders, without making a formal offer for your shares as required by the Company’s articles of association, and without offering fair value for your company”.
Muhammed-Oyebode affirmed that recent events have proved her predictions correct as the board of directors of the Company (BoD) had entered into agreements with Savannah Energy Investments Limited (Savannah), a wholly owned subsidiary of Savannah PLC, in an attempt to hand over control of the entire assets of the Company to Savannah for £855,000 funding under a convertible funding agreement and $1m funding under an option agreement.
She maintained that the assets of the Company were conservatively worth in excess of $500m, while the assets of the Company’s Otakikpo asset alone was conservatively valued at $200m.
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“In the absence of any substantial operations, the fund raised from Savannah will be applied to pay the fees of the directors and other advisers such as SP Angel and Tennyson Securities.
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“Shareholders are unlikely to receive a penny of the funds raised by the Company, nor will they be invested in the underlying assets of the Company. The Board further announced on 1 April 2022, the fees to be paid to the directors of the Company for the current year (amounting to approximately $290,000) and an intention to further dilute your shareholding (potentially by a further 20%, following the approximate 40% dilution that you have already suffered this year) through the issuance of shares pursuant to a contractor services arrangement”.
Lekoil Nigeria, according to her, has only ever sought to protect the interest of shareholders and create long term value for shareholders, and it was committed to develop its assets and increasing production from its producing assets, Otakikpo.
The Chairman stressed that it would be recalled that in line with its efforts to protect the interests of shareholders, in December 2021, Lekoil Nigeria announced a cash offer to acquire shares of shareholders who wished to exit their investment at 1.9p and a share exchange offer for those shareholders wished to continue in their investment in the Lekoil group.
She said the Board however took steps to ensure that those offers could not be easily accepted by shareholders, instead, the Board resolved to issue new shares to Savannah at 25% of the price offered for shares by Lekoil Nigeria in pursuant to the cash offer and effectively agreed to hand over the entire assets of Lekoil Nigeria Limited to Savannah for $1m under the terms of the Option agreement which they were asked to approve at the extraordinary general meeting held on Thursday, 7 April 2022 (whilst proposing to pay themselves approximately $300,000 per annum).
She further disclosed that Lekoil Nigeria found that the Board of Lekoil Cayman deliberately entered into financing arrangements that will lead to a significant diminution in the value of shareholders’ investment- the culmination of a takeover attempt orchestrated initially with Metallon Corporation and then being implemented with Savannah.
She said, “In the circumstances, the CEO (who is the single largest non-institutional shareholder/ founder of the Company), had no choice but to petition the Grand Court of Cayman Islands (where the Company was incorporated) for a just and equitable winding up, on the ground of the oppressive conduct of the Board, at the same time seeking to set aside the agreements entered into with Savannah and the unauthorised issue of shares to Savannah and other parties.
“Shareholders should not however be alarmed. Mr. Akinyanmi is seeking to ensure that shareholders who placed their trust in him and the Company do not lose their investments as a consequence of the de facto takeover of the Company that the Board has concluded with Savannah.
“The petition together with the efforts to set aside the transactions with Savannah was intended to ensure that the interest of shareholders are fully protected. Shareholders should understand that the steps been taken by Akinyanmi, were intended to protect their interest. It is time to place your faith in the right party”, she told shareholders.