RE: RNS1 Mar 2022 12:47
TennysonResearch "..the transaction is a significant step forward for LEK, bringing the clout of a deep-pocketed strategic partner and cash to fund working cap over 2022-critical, following the decision by Lekoil Nigeria to stop funding the PLC. Looking forward, SAVE will spearhead efforts to resolve all outstanding disputes to the benefit of all LEK shareholders , leveraging off its local relationships and in-country experience . SAVE intends to pursue LEK's rights to repayment of intercompany loans made to Lekoil Nigeria ( totalling US$350m including interest) and an overdue director loan (US$1.6m to Lekan Akinyanmi). Importantly, all LEK's major institutional shareholders (representing 42% of LEK's current share cap) have backed the transaction which provides a pathway to unlocking value in what could end up being a win-win situation for both sides. Furthermore, we believe the tie up provides a more compelling alternative to Lekoil Nigeria's 1.9p takeover offer for LEK which is effectively funded with cash owed to the PLC. For the time being LEK shares remain suspended however management is now stepping up efforts to unsuspend the shares- ideally upon resolution of the ownership impasse or possibly via reclassification as a cash shell (which critically would not require Lekoil Nigeria blessing ). In summary, if all goes according to plan, long suffering LEK shareholders may finally have something more positive to talk about ".