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Thursday, December 03, 2020 / 12: 04
PM / Comments off SEPLAT Release/ Header Image Credit: Seplat Petroleum
Over the week, the
Corporate Headquarters of Seplat Petroleum Development Company Plc (SEPLAT) at
No. 16A Temple Road, Ikoyi, Lagos was sealed by policemen on Wednesday,
December 2, 2020, ostensibly on behalf of a Receiver/Manager appointed by one
of Nigeria's tier-1 lending institutions, Access Bank Nigeria Plc. According to
a manager at the company, the sealing order prevented the company's staff and
other tenants from accessing the building.
Routine enquiries
concerning the sealing suggest that SEPLAT received copies
of legal documents which included the following: a
letter dated 2nd December 2020 from Messrs Kunle
Ogunba & Associates, stating that
they had been appointed as the Receiver/Manager of the building; Court documents filed by Access Bank
against SEPLAT, Cardinal and
other named Defendants.
SEPLAT's Corporate Headquarters was believed to have been sealed within the week in line with an ex
parte Court Order dated 13th November 2020, which was obtained in favour of Access
Bank Plc in connection with a Loan Facility the bank granted to Cardinal Drilling
Services Limited.
The Meat of
The Matter
Investigations also revealed that in 2012,
Cardinal Drilling Services Limited obtained a Facility from Diamond Bank (now
Access Bank) to purchase the CDS Rigs 101, 201, 202, and 203. The Facility was secured
by a fixed and floating Debenture over Cardinal's assets (the
"Debenture").
Managers at SEPLAT say the company was not
a party to the Facility or the Debenture and did not provide any guarantees or
indemnities on behalf of Cardinal or otherwise in connection with the
Facility.
It was understood
that Cardinal Rigs were used to provide drilling services to SEPLAT and
other companies. CDS 101 and 201 were used to execute SEPLAT's 2019 work
programme and all
4 Rigs were critical to SEPLAT's future drilling plans.
With time, it was understood that Cardinal was
unable to service the outstanding part of the Facility, which Access Bank showed to be an outstanding debt of US$85.8m.
It was learned that Cardinal and Access Bank had
on the 15th January
2019, agreed on a settlement of $45 Million, to be paid in two (2) installments
by 31st December 2019.
On the 25th
of April 2019, Cardinal failed to pay the 1st tranche of the settlement amount
(i.e., $30 Million), which was due on or before the 18th of April 2019.
SEPLAT's
Supply Chain Intervention
Given the importance of the Cardinal Rigs to
SEPLAT's operations, SEPLAT supported discussions between Cardinal and Access
Bank to resolve Cardinal's indebtedness and Access Bank's proposed foreclosure on the Rigs.
To date, managers at SEPLAT insist that the company has not made any
binding commitment to Access Bank in connection with Cardinal's
indebtedness.
Indeed,
SEPLAT claims to have merely
sought to support settlement discussions between Cardinal and Access Bank, to
retain its continued use of the Cardinal Rigs in ongoing operations which was, therefore, basically a vertical
supply chain protection strategy.
Following Cardinal's increasing indebtedness and
failure to pay the agreed settlement, Access Bank joined SEPLAT in its remedial
action strategy to recover its loan from Cardinal.
According to available
information Cardinal, in its response to Access Bank, noted that it was in discussions with
SEPLAT on possible funding support.
Cardinal's
Deadly Debt Migraine
Clause 6 of the
Deed of Debenture on the loan
facility granted to Cardinal allowed Access Bank the
right to appoint a Receiver/Manager over the company's assets if Cardinal failed to liquidate the Facility. On
12th October 2020, Access Bank appointed Kunle Ogunba & Associates to act
as the Receiver/Manager.
On 13th November 2020, Access Bank filed a Court
action against SEPLAT; Cardinal; a Seplat Director; and a Cardinal Director
(the "Defendants").
According to court
proceedings, Access Bank asked the Court grant the following prayers: validate the appointment of
Kunle Ogunba & Associates as the Receiver/Manager; validate the
Receiver/Manager's authority to take possession of the 4 Cardinal Rigs and
other assets of persons and companies presumably connected to Cardinal
drilling; restrain all Defendants from disposing or dealing with the Assets;
declare that the Defendants have no right to enter into, or deal with, any of
the Assets.
A call to an officer at
SEPLAT, who requested for anonymity as he was not authorized to speak on the
matter, confirmed that the company's office was sealed without
prior notice. He noted that the official
legal counsel of the company had observed that the sealing of the Temple Road office of the upstream Oil and Gas company may have been in violation
of the rights of the owner
and other tenants who
were allegedly unduly
prevented from accessing the building.
The officer further noted
that the Temple Office was not
one of SEPLAT's assets, as SEPLAT was merely a tenant
in the building. He believed
that any court order
on SEPLAT's assets did not extend to the Temple Road premises of the company.
Related
Links to Release
1. Seplat
twitter Seplatpetroleum status on temple Road
2. Seplat PressReleases
3. Seplat website
4. Seplat's Corporate
Disclosure on the NSE
EDITORS NOTE:
In the light of the claims made above and the
information available from financial returns/reports; we are looking at and
will report on the governance/related party relationship between Seplat PLc and
Cardinal Drilling Nigeria.
Visit Seplat Petroleum Development Company Plc IR Page in Proshare MARKETS
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