It will take a miracle for CEO of Oando Plc, Wale Tinubu, and his deputy, Mofe Boyo to wriggle of their present ordeal unscathed following debt crisis that is threatening their positions in the company.
The recent decision by a London court of arbitration that Ocean and Oil Development Partners owned by Tinubu is indebted to Ansbury Investments Inc. to the tune of $600 million while Whitmore Asset Management Limited, owned by Moyo is also indebted to the Ansbury to the tune of $80 million has further worsen their case.
Despite their attempt to turn the consequential but partial award of the London Court of International Arbitration (LCIA) on its head, it was abundantly clear that the declaration of the arbitration tribunal settles the sums which make up the shareholder loans given by Ansbury to OODP BVI and Whitmore for the acquisition and exploitation of ConocoPhillips’ upstream assets in Nigeria cannot be controverted.
The arbitration tribunal declared that the Third Shareholders’ Agreement (SHA) between the parties was binding, the Fourth SHA never became effective, Whitmore was in breach of the repayment obligations stated in the First Loan Agreement for $80 million, the alleged oral agreement to switch the parties’ respective shareholding in OODP BVI was not binding on the parties, and Ansbury was and remains estopped from claiming repayment of the any of the loans prior to January 1, 2018.
The tribunal further held that OODP BVI is presently indebted to Ansbury in the total principal sum of $600 million, being $130 million in respect of the initial loans and $470 million in respect of the subsequent loans, which sums are overdue and owing. It also declared that Whitmore is presently indebted to Ansbury in the total principal sum of $80 million in respect of the loan made under the First Loan Agreement.
Despite the clear-cut ruling, Oando, through its chief compliance officer and company secretary, Ms. Ayotola Jagun, was quick to assert that based on the shareholding structure of OODP BVI, Volpi would in fact be paying himself $360 million.
It must be noted that the shareholder loans provided by Ansbury were the ideal debt-financing structure in managing the leveraged buyout of ConocoPhillips’ upstream assets and should not have been trifled with by Tinubu and Boyo. Had Volpi not come to their aid, it would have been next to impossible for them to achieve their dream of turning Oando into a full-fledged integrated energy firm.
It will also be foolhardy for Oando to continue to maintain that it is not indebted to Ansbury or that the latter is not a shareholder in Oando.
Insofar as OODP BVI and Whitmore remain indebted to Ansbury, there is nothing stopping Volpi’s firm from converting its loans into equity, and assuming full control of OODP BVI.
Should this happen, Tinubu and Boyo would have no direct or indirect claim on Oando and would have to kiss the company goodbye.