Oando
Plc has described as false, the report that it had been ordered by the
London Court of International Arbitration (LCIA) to pay Ansbury
Investment Inc. $680 million, saying the calculated misinformation arose
from a statement issued by the lawyer and legal counsel of Ansbury
Investment Inc., Mr. Adrea Moja, following the LCIA’s ruling in London.
According
to a statement by Oando, the LCIA ruling follows months of arbitration
on a loan repayment dispute between Oando PLC’s Group Chief Executive,
Adewale Tinubu; the Deputy Group Chief Executive Omamofe Boyo,
beneficial owners of Whitmore Asset Management Limited and Gabriel Volpi
the beneficial owner of Ansbury Inc.
The statement added that
the dispute dates back to 2017 when Gabriel Volpi allegedly attempted to
breach a loan repayment agreement between him and Whitmore Limited in
the British Virgin Island.
Ansbury and Whitmore Limited
incorporated a joint venture investment vehicle in the British Virgin
Islands called Ocean and Oil Development Partners (OODP BVI). OODP BVI
owns a 99.99 per cent stake in Ocean and Oil Development Partners (OODP
Nigeria) who in turn owns 57.37 per cent stake in Oando PLC.
Contrary
to media speculations, the LCIA had infact ruled that OODP BVI which
Gabriel Volpi owns a 60 per cent stake in should pay Ansbury (his own
company) a total sum of $600 million while Whitmore pay Ansbury
$80million. Going by the ownership structure this implies that Gabriel
Volpi would infact be paying himself $360 million.
The payment terms is yet to be released by the LCIA and is expected to be made known to the parities in the due course.
The
dispute between Ansbury and the Whitmore principals arose when Gabriel
Volpi called in his loan repayment before its due date, January 1, 2018.
Volpi had allegedly invested $750 million used for Oando’s purchase of
ConocoPhillips Nigeria assets.
He further breached the
jurisdiction of the law governing OODP BVI by petitioning the Nigerian
Securities and Exchange Commission accusing Oando PLC of ‘financial
mismanagement and cooked books, a company his counsel claims he has a
majority shareholding in, all a bid to recoup his loan from the
principals.
Oando’s public documents has proven that the claim of
Volpi’s shareholding is false. OODP Nigeria, as at the time of this
report, remains the majority shareholder in Oando with a 57.37% stake in
the company.
Gabriel Volpi has in the past few years been linked
to several scandals in the country including the disagreement between
his maritime company, Integrated Logistics Services Limited (INTELS) and
the Nigerian Ports authority (NPA).
The NPA had instructed
INTELS to comply with the Treasury Savings Account (TSA) in a project,
which the logistics firm was handling for the agency. This instruction
did not go down well with the INTELS as it argued that the TSA would
affect the payment of its loan to the banks.
In a letter to the
Managing Director of NPA, Ms. Hadiza Bala Usman, the Chief Executive
Officer of INTELS, Andrews Dawes, at the time, made it clear that the
TSA would cause a run on the finances of the company.
The
altercation between the two heavyweights led to the cancellation of the
project by NPA and brought to the forefront other underlying issues
leading to the Federal Government’s (through NPA) decision to break
INTELS’ monopoly, which was detrimental to indigenous companies in the
oil and gas logistics sector.
Despite attempts to bring Oando and
its principals to its knees, the company has successfully navigated
through this difficult time and the reputational damage caused by the
SEC saga. In 2017, the company recorded profits in all four quarters and
more recently Oando recorded a N4.2 billion PAT in Q1 2018 and 19.8
billion PAT in its FYE 2017 financial results. Oando has recorded six
consecutive profits since posting its FYE 2016 results.
Following
the reputational and financial losses suffered by the company as a
result of Volpi’s petition to the SEC, Oando kicked off 2018 by reaching
a peace accord with one of its petitioners, Alhaji Dahiru Mangal in the
bid to restore shareholder confidence in the brand.
In April, a
two party consortium consisting of Oando PLC (“Oando”), in conjunction
with its midstream affiliate, Axxela Limited (formerly known as Oando
Gas & Power) and Oilserv Limited, were awarded the Engineering,
Procurement, Construction (EPC) mandate for the Ajaokuta – Abuja portion
(Lot 1) of the Ajaokuta-Kaduna-Kano Pipeline system by the Nigerian
National Petroleum Corporation (“NNPC”).
The contract award
follows an extensive due diligence process conducted by the NNPC
following a submission by Oando and Oilserv in 2013 in response to an
Expression of Interest for a contractor-financed EPC development of the
AKK Pipeline Project. The US$727million Ajaokuta-Abuja Pipeline
development is a 215km gas infrastructure with associated facilities
such as Metering/Terminal Gas Station, Pigging Station, Block Valve
Stations etc.
Much to the relief of its over 270,000 shareholders
who suffered untold hardship as a result of the SEC crisis, the
Commission gave the directive to lift the technical suspension on the
shares of Oando. On its first full day of trading, Oando’s shares were
already highly sought after. According to the Chief Compliance Officer
and Company Secretary, Ms. Ayotola Jagun; “On day one, 178 million Oando
shares were on bid with only 5.5 million available for sale. The
Company’s share price hit the NSE daily price ceiling of 10% by 10.45am;
further evidence that there is a lot of interest in Oando shares and
that the general mood around the market and our shares is positive.”
Most
recently, Oando Nigeria Agip Oil Company (NAOC), Shell Petroleum
Development Company (SPDC), other indigenous and international oil
companies in partnership with the Nigerian National Petroleum
Corporation (NNPC) achieved a commendable feat with the signing of an
agreement to implement Gas Projects worth $3.7 billion. The gas projects
tagged ‘Seven Critical Gas Development Projects (7CGDP)’ is set to
bridge the gas supply shortfall in the country. The 7CGDP is an integral
part of the gas development strategy designed by the NNPC to leverage
the full potential of gas to meet the target of generating at least 15
gigawatts (GW) of electricity by 2020. The agreement includes the
development of the 4.3 trillion cubic feet (TCF) Assa North/Ohaji South
field, the development of the 6.4 TCF Unitized Gas fields
(Samabri-Biseni, Akri-Oguta, Ubie-Oshi and Afuo-Ogbainbri) and the
development of 7 TCF Nigerian Petroleum Development Corporation’s (NPDC)
OMLs 26, 30 and 42.
Like many other global brands, Oando took
the risk of seeking an equity investment from Gabriel Volpi, one which
hasn’t turned out in its favour. The company has been questioned for
getting into bed with the devil. The answer to this question could lie
in a desperate bid of two young Nigerian entrepreneurs striving to add
value to the country by providing gainful employment both directly and
indirectly to Nigerians as well as add its quota to the country’s GDP. A
company that has successfully evolved from a downstream company to an
active player in the full oil and gas value chain.
Volpi is
presumed a cowboy investor and one who is not particularly interested in
adding value to the Nigerian economy, community or impacting lives.
Rather than creating a lasting positive impact, his actions have proven
he is hell-bent on destroying value at all cost, even if it’s to the
detriment of over 270,000 shareholders and over 25,000 lives impacted as
a result of direct and indirect employment by Oando. In this instance,
we must ask ourselves the following question, do we want one of
Nigeria’s most prestigious oil and gas companies who has positively
impacted the nation since inception to be destroyed?
