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Lekoil Ltd - London-based oil and gas exploration and production company with projects focused in Nigeria and West Africa - Shareholders Lekoil Nigeria speaks out against proposal between Lekoil and Savannah Energy PLC, where a convertible facility agreement was signed on Monday for Savannah to provide a £900,000 loan, repayable on Wednesday and bears 5% per annum interest.
Should Lekoil not pay, Savannah can convert the outstanding amount to 177.1 million new shares in Lekoil at a price of 0.5 pence each.
Savannah will also agree with Lekoil to have unpaid fees settled by the issue of 22.9 million new shares, and both companies have signed an option agreement granting Savannah the option to be assigned the company debt owed to Lekoil by Mayfair Assets & Trusts Ltd, and its associated security related to OPL 310.
Should the option be exercised, Savannah will pay $1 million to Lekoil.
On Monday, Lekoil outlined its restructuring plans, which includes an attempt for the company to restore its share to trading, and engage with Lekoil Nigeria to pursue its right to loan repayments and to appoint directors.
In response to this, Lekoil Nigeria - which holds an 11% interest - says the proposal is ‘value destructive’, which ‘wrongly assumes that the assets of the business would be handed on a plate to Savannah’.
Lekoil Nigeria put forward its own proposals, including a restructuring to remove the costs associated with the company, requisitioning an extraordinary general meeting to remove its entire board, and start legal action to render the Savannah deal void.
Current stock price: suspended
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