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Amazed only 9% down and buys coming in.
Nice.
What is not clear from the RNS is what impact the escalation of the disagreement has with COPL's ongoing operations regarding OPL226, specifically finalising the proposed finance package.
The claim centres around ShoreCan not commencing financing of the development, the very thing that Arthur is currently pursuing with proposed investors. Jiving raises a very pertinent point that all involved will have done due diligence, which will have included the disagreement with Essar Mauritius, and were satisfied with the information they received. The risk of escalation will have been known, so now that it has happened, does it change ShoreCan's position? As I understand it, EM were responsible for the performance bond, something they haven't arranged so I do believe ShoreCan have a case to argue.
The question I have is, if ShoreCan can finalise their proposed finance package, where would that leave Essar's claim? If finance is completed as intended within the coming weeks, ShoreCan will then have effectively funded the development. I suspect EM's argument will subsequently collapse. So the best way to fight this claim may be to push forward with discussions with the investors and get it completed as soon as possible.
Correction;
Having several valid defences and counterclaims, which is definitive, has now gone to several valid defences and 'possibly' counterclaims is not quite the same. So not the same level of emphasis on EM as a defaulter.
Interesting to note the difference in terminology being used to describe this dispute and that of the dispute with Agamore. In Agamore's case the parties consider the action to be 'ill-founded' and that the action 'will be dismissed in due course'.
With this EM dispute they state, 'The Company's directors believe, based on legal advice, that ShoreCan has several valid defenses to the action brought by Essar Mauritius and possibly counterclaims of its own.'
I also preferred the previous response to this dispute, included in the Nov 19 MD&A, rather than the rather less strident utterings above.
'Essar Mauritius asserted that ShoreCan has not commenced funding of the US$80 million agreed cumulative funding in Essar Nigeria. ShoreCan has denied the claim and produced evidence of substantial expenditure to date. ShoreCan also alleged that any delay in securing mainstream long-term project funding is due in part to the failures of Essar Mauritius to comply with its obligations under the Essar Nigeria Shareholders Agreement. The Essar Nigeria Shareholders Agreement contains a dispute resolution process which ShoreCan has sought unsuccessfully to invoke. As at the date hereof, Essar Mauritius has not sought to terminate the Essar Nigeria Shareholders Agreement and no formal proceedings have been commenced by either party. As such, there has been no quantifiable impact to the Company’s working capital or its operations. ShoreCan will vigorously contest any action by Essar Mauritius to terminate the Essar Nigeria Shareholders Agreement in the English courts which have jurisdiction over any formal dispute. The directors are of the belief that ShoreCan has several valid defences and counterclaims to any such action.'
Of note was the seemingly purposeful splitting up of the last sentence immediately above when it came to today's announcement. Having several valid defences and counterclaims, which is definitive, has now gone to several valid counterclaims and 'possibly' counterclaims is not quite the same. So not the same level of emphasis on EM as a defaulter.
For all the news this morning the SP is holding up better than I for one expected. The only way that happens is with buying support. I am certainly erring towards it most definitely not being the Ruia's doing any buying. The Ruia's could buy us now without the litigation costs and delay's that the court case would bring. Plus there is the small matter of a further PSC to negotiate with the NNPC as its clear we won't be satisfying the conditions for the current extension.
I suspect it is PI's buying here on the drop and if anyone of note was buying it would be more likely Shoreline picking up here. Shoreline also have first offer on any sale of COPL's interest in OPL226 so any move by the Ruia's would be more than capable of being matched by Kola.
Lots of conspiracy threads could be evident but the one thing this has made clear to me is that it now seems implausible that EM and Shoreline are in any way acting together so that removes one conspiracy theory.
Bold move MK hope for all our sakes its also the right move. Looks to me like you are not alone. The Essar dispute blew up what end May 2018, so nearly 2 years ago. Arthur & Kola surely must have allowed for the possibility it could end up in court & prepared for this eventuality. Just as importantly it is a public dispute so all potential partners must also be aware of it & figured it into their thinking.
IMO this is a not a fatal blow & indeed may be beneficial in clarifying the situation. Incidentally Essar have had at least one case dismissed in the UK & received a hefty cost award against them & scathing comments from the judge.
I took a gamble that it would drop and bounce this morning and have managed to increase my holdings by 15%
That thought occurred to me as well RK! Amidst the gloom it looks to me like we have some serious buyers as well as anticipated sellers. A total collapse we would have gone essentially offer only but we have stabilised & bounced off the bottom.
Someone is buying up a big percentage of the company on the cheap.
Wonder if it's the Ruia brothers.......the little tinkers !
More hugh 56m + 57M trades showing now...all worked buys?
Read RNS, extract below:
The Company notes that these claims are for ShoreCan, and neither the Company nor its Joint Venture Partner, Shoreline Energy International Limited are parties to the claim .
Expect this to tank today.
Court cases notoriously are expensive and lengthy.
Until settled we cannot progress with financing for the wells.
Its not formality Charlie this is a serious challenge to us staying in business.
It doesn't take much to grasp that we have no money and we will need money to defend this case. It may well come down to having to rely on another businessman. We will lose something out of this saga that is absolutely certain just what that is and how severe it is to shareholders is anybody's guess having been provided with so little information.
This will not be quick either. The announcement as have previous announcements, made it clear that there is claim and counter claim here. There has been no desire to settle this in line with the dispute resolution procedure under the partnership agreement so EM are in this for the long haul. Many have suspected this and time means nothing to EM. It does to us.
Must see a quick end in sight otherwise why did he stump up £200k .................................. more formality than anything else and IMO this will be sold following drill result or bought out
The issue now comes down to how we manage this court action with no funds. Yes it is opportunistic by Essar Mauritius (EM) but they have had this course of action under their belt for two years and its reasonable to believe they were just biding their time. That time is now and at least we all know where we now stand. If Art can, and its a big if, get the funds together to finance the defence then we have a fighting chance of eventually moving forward once the case has been decided. That will take some time and EM know it. Our saving is now I suspect in the hands of Kola. Let's see what 'partnership' really means to him.
And that in an absolute nutshell is why we have not had the funding. The commercial dispute has to be settled before any financier will step forward. At last we have the reason in an official announcement.