Lekoil, a Nigerian oil company, warned Monday that it is unable to continue as a going concern following a loss of $119.3million for 2020. This added pressure on the company.
Lekoil stated that the loss and high costs forced Lekoil to trim 40% of its staff, renegotiate terms, and take measures to lower overheads. The details of the headcount reduction were not disclosed by Lekoil.
The company was involved in a dispute with its largest shareholder earlier this year over board representation. Lekan Akinyanmi, Lekoil’s founder, and Metallon fought over board representation. This led to Nigeria’s Ministry of Petroleum bringing in additional pressure on Lekoil after a 2020 fraudulent loan.
Anthony Hawkins, interim executive chairman, stated in a statement that the board was currently preparing a separate financial position for the company and its wholly-owned subsidiaries prior to any fundraising.
Lekoil, with cash and cash balances in excess of $3 million at the close of last year, stated that it had faced “considerable” problems in 2020.
Lekoil stated that “notwithstanding the material uncertainties, the directors’ confidence and the mitigating measures available supports the preparation of the financial statements on a going concern basis.” (Reporting by Pushkala Aripaka in Bengaluru; Editing by Shailesh Kuber)
