Nigerian billionaire Femi Otedola’s Zenon wins $19.2-million arbitration award against Ardova

Mfonobong Nsehe -

Zenon Petroleum & Gas Limited, an oil marketing company founded by Nigerian billionaire Femi Otedola, was awarded $19.2 million after defeating Ignite Investment Limited in an arbitration case filed in the London Court of International Arbitration (LCIA).

The LCIA ruled in favor of Zenon in three of the four claims presented to the tribunal in the arbitration case filed by Ignite Investment, an investment company owned by Nigerian energy mogul Abdulwasiu Sowami, over the share purchase agreement reached on the sale of Forte Oil Plc (now Ardova Plc) in 2019.

With the award in Zenon’s favor, it was expected that Ignite would make all due payments in accordance with the award. However, the London court ordered that Ignite make the SPA agreed payments less the amount awarded for one of the claims.

The tribunal’s decision comes two months after Zenon filed a winding-up petition against Prudent Energy and Services Limited, Ignite’s parent company and the majority shareholder in Ardova, for a $6-million debt.

The debt was allegedly incurred as a result of a 2018 transaction in which Zenon, led by Otedola, sold 74.02 percent of Forte Oil’s issued share capital to Sowami and Ignite Investment and Commodities Limited for $200 million.

The $19.2-million payment that Ignite is expected to make to Zenon adds to the pressures on Ardova and its majority owner, as the company’s shares have fallen significantly from an average price of N23.6 ($0.055) per share in 2019 to N13.75 ($0.0305) per share at the time of writing this report.

Ardova reported a N3.8-billion ($8.93 million) loss for the 2021 fiscal year, its first since being purchased by Prudent Energy.

It is also on track to lose money this year, having reported a loss of N1.15 billion ($2.63 million) in the first half of 2022, compared to a profit of N1.78 billion ($4.07 million) in the same period of the previous year, as the rise in operating expenses and finance costs continued to eat into earnings.