Ardova Plc (formerly Forte Oil) risks forceful liquidation of its assets as Zenon Petroleum and Gas Limited dragged it to court over a $6 million debt.
BizWatch Nigeria understands that billionaire AbdulWasiu Sowami, the Chief Executive Officer (CEO) of Prudent Energy and Services Limited, through his investment portfolio, Ignite Investments and Commodities Limited, acquired a 74.02% stake in Forte Oil Plc in 2019, which later rebranded to Ardova Plc after the acquisition.
However, in a suit at the Federal High Court, Lagos, with No. FHC/L/CP/1450/2022, Zenon Petroleum and Gas Limited alleged that the $6 million debt rose from the sale conducted in 2018.
According to the court filing, the company alleged that the security for the deferred consideration for the sale of the shares, Prudent Energy and Services Limited and Sowami had provided a guarantee in favour of Zenon Petroleum & Gas Limited and its affiliates for the prompt payment of the deferred consideration as at when due.
Zenon maintained that Ardova Plc failed to honour the consideration, which includes the payment of $6 million that was due to be paid on Saturday, June 18, 2022.
More worries for Ardova Plc
While Zenon Petroleum and Gas Limited had dragged Ardova Plc to court for the outstanding $6 million debt, there are other concerns that the latter may have diverted its N25.3 billion Series 1 Bond of November 2021 for other unknown uses.
Although the bond issued under the firm’s N60 billion Debt Issuance Programme had been completed, disclosure issues seem to have brought the Bond issuance programme to public discussion.
Ardova Plc published that the proceeds of the bond would be used in four different places, which were -(I) Retail expansion projects, (II) Working capital requirements. (III) Upgrade of existing infrastructure, and (IV) Provision for debt service reserve account funding. However, with the embattled oil and gas company lumping the usage together under expansion projects and working capital requirements, experts expressed worry that the funds may have been diverted to other uses.
