Prudent Energy Denies Alleged Wind-Up

BY OLUSHOLA BELLO, Lagos

Prudent Energy & Services Limited (PESL) has denied an allegation of a charge to wind-up over an alleged inability to pay $6million debt, which has been presented to the Federal High Court by Zenon Petroleum and Gas Limited (Zenon).

Prudent Energy in a release on Tuesday said the story was misleading, explaining that the sale and purchase agreement between Ignite Investments and Commodities Limited and Zenon included 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.

It stated that this is a 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, to Ignite.

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It added that 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 Ignite. The arbitrators have indicated that a decision will be made in the month of August 2022.

“PESL, the parent company of Ignite, provided a corporate guarantee to Zenon in respect of  any obligations of Ignite to Zenon.  The actual obligations of Ignite 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,” it explained.

It stated that the subject of Zenon’s winding-up petition and its entitlement to any sum from PESL were being vigorously contested by PESL through a High Court suit commenced by PESL against Zenon on July 21, 2022 to prevent Zenon from frivolously enforcing the corporate guarantee until the arbitral award has been delivered.

It clarified that Zenon is aware that the subject of its petition will be resolved by arbitration very soon, saying it has nevertheless commenced winding-up proceedings against PESL, a move that obviously seeks to pre-empt the imminent decision of the arbitrators.

PESL assured stakeholders of a sustainable business based on sound corporate governance principles and best ethical standards, adding, “we will continue to generate robust cashflows that are in excess of our requirements to fulfil all commitments to counterparties.”

It added that the matter with Zenon is being handled via the proper channels.