Lekoil Nigeria agrees to end legal dispute with Cayman subsidiary after two years

Lekoil Nigeria Limited, an oil and gas exploration and production company, says it has reached an agreement with it’s subsidiary, Lekoil Cayman, to terminate all legal proceedings and settle all claims made by or between the parties.

The company announced this in a statement on Thursday.

Lekoil Cayman, a Cayman Islands-registered AIM-listed ligation asset company, holds a 40 percent equity holding in Lekoil Nigeria.

The parties have been in dispute since early 2020 in connection with a number of matters including the rights of Lekoil Cayman under the shareholders agreement in respect of Lekoil Nigeria as well as the various inter-company loans granted by Lekoil Cayman to Lekoil Nigeria and its related entities.

According to the statement, the settlement covers all the disputes that arose between Lekoil Nigeria Limited, Lekoil Cayman, Lekan Akinyanmi, chief executive officer and founder of Lekoil Nigeria, concerning the management of Lekoil Cayman and related entities, proprietary interests, liabilities and contractual and non-contractual rights and obligations of the parties.

One of the agreements was Lekoil Cayman changing its name to Fenikso Limited and to cease using the “Lekoil” name or brand in connection with its business.

In addition, the shareholders agreement between Lekoil Nigeria and Lekoil Cayman will be terminated.

However, the future relationship of parties will be renegotiated.

“In order to resolve these differences, and with no admission of liability, the company (Lekoil Nigeria), Lekoil Cayman and Mr. Akinyanmi, among others, have entered into a settlement deed on 7 December 2022 (the “deed”) to agree to, among other things, the release and discharge of all relevant claims, the withdrawal of legal proceedings, surrender of certain shares and other transactions, a new framework for their future relationship and fully and finally to resolve their differences, dispose of ongoing litigation and agree certain ancillary matters (the “LNL arrangements”),” the agreement reads in part.

“The LNL arrangements include: Lekoil Cayman agreeing to surrender all of its shares in the company and transfer those of its subsidiaries involved in the operations of the Lekoil Nigeria group to the company;

“The company agreeing to surrender all of its ordinary shares in Lekoil Cayman; Lekoil Cayman waiving all rights to repayment in respect of any and all existing indebtedness due from the company, its subsidiaries or from Mr. Akinyanmi under various loans;

“Lekoil Cayman granting a new loan of approximately US$51.9 million to Lekoil Oil and Gas Investments Limited (“LOGI”) (the “LOGI Loan”) in consideration for the transfer of certain loans granted to the company and its related entities to LOGI, the release of security related to such loans and the waiver of any repayment of amounts due under such loans; the stay and subsequent discontinuance and/or withdrawal of all claims and legal proceedings between the company, Lekoil Cayman and Mr. Akinyanmi (and others);

“And Lekoil Cayman changing its name to Fenikso Ltd and to cease using the “Lekoil name or brand in connection with its continuing business.”

The statement added that implementation of the arrangements would require the approval of Lekoil Cayman’s shareholders.

Commenting on the development, Aisha Muhammed-Oyebode, chairman of Lekoil Nigeria Limited, said: “We are pleased with the amicable resolution of the issues. This agreement illustrates the tenacity and commitment of all the parties to delivering long-term value to shareholders.”

“I thank members of the board of Lekoil Nigeria as well as our partners for their understanding and support during the difficult period that we witnessed in the last two years. We remain optimistic about the future and are assured that brighter years are ahead”.