Wind-up Petition: GCR Places Ardova Plc on Watch
GCR Ratings has placed the national scale long-term and short-term Issuer ratings of A-(NG) and A2 (NG) respectively, accorded to Ardova Plc on rating watch negative over a potential risk associated with the wind-up petition before the downstream oil company.
In a rating statement, the emerging market rating firm said its review follows the recent development with regards to a wind-up petition currently before a federal high court.
Recall that Zenon Petroleum and Gas Limited filed a wind-up petition against Prudent Energy Services Limited, the largest shareholder in Ardova Plc. READ: Forex Trader Jailed for N20m Cryptocurrency Fraud
In its rating statement, GCR however noted that the solicitors to Prudent Energy Services Limited are of the opinion that Zenon’s demand and winding-up petition are both misconceived and mischievous.
Nevertheless, GCR said it will closely monitor this development and assess the impact on Ardova’s overall credit risk profile, accordingly.
“We anticipate resolving the ratings watch when we get more information regarding the legal, reputational and financial risks facing the Company”, the firm stated in the new rating note on Ardova Plc.
Zenon Petroleum and Gas Limited is asking the court to wind up Prudent Energy and Services Limited, the parent company of Ardova Plc, for failing to pay $6 million in debt. The debt relates to the acquisition of a 74.02% stake in Forte Oil Plc in 2019, a company formerly owned by billionaire investor and Chairman Geregu Plc, Femi Otedola.
Recall that AbdulWasiu Sowami, chief executive officer 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.
Zenon Petroleum, in a suit at the Federal High Court, said the debt arose from the sale conducted in 2018 where Zenon Petroleum & Gas Limited and its affiliates sold 74.02 per cent of the issued share capital of Forte Oil Plc (now Ardova Plc) to Sowami and Ignite Investment & Commodities Limited.
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.
#Wind-up Petition: GCR Places Ardova Plc on Watch
