Lekoil Nigeria Limited, the oil and gas exploration and production company with a focus on Nigeria and West Africa, in which Lekoil Limited (AIM: LEK) has a 40 per cent equity interest, has notified shareholders of Lekoil Limited that it has made an offer to the Board of Directors of the Company to acquire the inter-company loan of US$110 million made by the Company to group company, Mayfair Assets & Trust Limited (Mayfair Loan).
Lekoil Nigeria has approached her subsidiary, Lekoil Cayman, with an offer of “an initial purchase price of US$1.5million, representing 50 per cent more than that which the Board of Directors of the Company has agreed to sell the Mayfair Loan to Savannah Energy Investments Limited (Savannah) pursuant to the Option Agreement and “a deferred payment of US$110 million, being more than twice the deferred consideration proposed to be paid by Savannah pursuant to the Option Agreement.”
By implication, the acquisition of the Mayfair Loan by Lekoil Nigeria will not only prevent the loss of OPL 310, it will also have neutral effect on the value of the shareholders’ stocks.
Lekoil Nigeria has further urged the Board of Directors of the Company to act in the best interest of shareholders by calling off the extraordinary general meeting slated for Thursday, 7 April, 2022 especially because upon the offer to acquire the Mayfair Loan, there would no longer be any commercial reason for Lekoil Cayman to consummate the Option Agreement with Savannah. Lekoil Nigeria believes that any contractual issues arising from the cancellation of the extraordinary general meeting can be managed with limited impact on the company.
However, in the event that the Board of Directors of the Company rejects this superior offer and demonstrates lack of will to act in the best interest of shareholders of the Company, Lekoil Nigeria is urging shareholders to vote against the approval of the Option Agreement at the extraordinary general meeting.
It would be recalled that Lekoil Cayman announced on February 28, 2022, that it has entered into a convertible facility agreement (the “Savannah CFA”), option agreement (the “Option Agreement”) and the tripartite agreement (the “Tripartite Agreement”) with Savannah Energy Investments Limited (“Savannah”), a wholly owned subsidiary of Savannah PLC., which essentially offers Lekoil Limited USD1million to buy the Mayfair loan
