[ Note: This page was last updated on 6 December 2006 . I will be unable to provide any shareholder with any further information or guidance. Accordingly, I would ask shareholders not to request updates from me in the meantime so that I may focus on realising the company's assets and progressing my investigations. Shareholders should note that their shares have no value.]
Background
I was appointed Official Liquidator of Bula Resources (Holdings) PLC ("the company") by Order of the High Court on 15 March 2004, on foot of a winding up petition issued by Computershare Investor Services (Ireland) Limited. I have not been appointed liquidator to any of the company's subsidiaries.
Statement of Affairs
The High Court ordered that the company's sole remaining director, Mr Omar Yazigi, submit a sworn Statement of Affairs to the High Court by 5 April 2004 . Such a sworn Statement of Affairs has to be in a statutory format, and it should list all of the company's assets and creditors.
Mr. Yazigi delivered to me on 8 December 2004 the sworn Statement of Affairs, a summary of which I set out below:
|
|
Book Value
|
Realisable Value
|
|
|
€
|
€
|
|
Bank
|
266,577
|
266,577
|
|
Debtor: Al Thamer Establishment (
Bahrain
)
|
937,500
|
Nil
|
|
Unpaid Calls
|
103,992
|
Nil
|
|
Investments/Loans to subsidiaries
|
6,591,500
|
Nil
|
|
Unsecured Creditors
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(2,270,564)
|
(2,270,564)
|
|
Deficiency
|
|
(2,003,987)
|
I detail below the unsecured creditors who are shown to be owed in excess of €100,000:
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Tom Kelly (Fees and Expenses)
|
€142,827
|
|
Albert Reynolds (Fees and Expenses)
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€224,798
|
|
Computershare (Share Registrars)
|
€200,671
|
|
Johnston/Mulryan (Shareholders Loans)
|
€204,000
|
|
Omar Yazigi (Fees and Expenses)
|
€344,800
|
|
Revenue Commissioners (Stamp Duty)
|
€659,256
|
|
|
€1,776,352
|
There are 16 other creditors who are shown to be owed €494,212.
The Statement of Affairs contains the following note: “The audited annual accounts to 31 December 2001 include a note that the company has guaranteed the liabilities of all its Irish incorporated subsidiaries for the year ended 31 December 2001. In preparing the above creditor list no allowance has been made for creditors of the Irish subsidiaries.” I would mention that Note 21 to the audited accounts of the company for the year ended 31 December 2001 quantified these liabilities at €462,000.
I will not be taking any steps to formally agree the claims of unsecured creditors until I am confident that a dividend will be payable.
Cash and Bank Balances
The Statement of Affairs shows bank balances of €266,577. I have realised cash and bank balances of €254,337. The Statement of Affairs shows a balance of US$15,000 in a Libyan bank which I am attempting to realise.
Investments / Loans to Subsidiaries
The Statement of Affairs shows Investments/Loans to subsidiaries with a book value of €6,591,500 and a realisable value of nil.
The company did not hold any oil and gas interests directly. Such interests were held by subsidiaries of the company.
One of the issues I face is that the subsidiaries which hold the main oil and gas interests are not 100% direct subsidiaries of the company, but are owned by intermediate holding companies, namely Bula Resources Limited and Bula Oil America Incorporated. As a result of these intermediate holding companies, I do not have direct control over the relevant subsidiaries.
Apart from modest bank balances, the principal assets held by the subsidiaries may be considered to be:
-
Seismic data purchased by the subsidiaries, or generated by them in the course of their exploration activity.
-
Interests held in licenses/concessions.
I instructed a firm of Geologists to advise me if the seismic data held by the subsidiaries had any material value. Their advice to me is that some of the seismic data would have value, but that the subsidiaries would have difficulties in selling the data due to confidentiality agreements signed at the time of acquisition. The subsidiaries could also face other restrictions in attempting to sell the data. Another issue is that the principal subsidiaries, or their intermediate holding companies, are insolvent, and any realisations from the sale of seismic data would have to discharge liquidation costs and other expenses before any benefit could flow to the company.
In recent years the Bula Group concentrated its exploration activities in Libya and Iraq. While the group had spent considerable monies in progressing these interests, no contracts were ever ratified by the appropriate authorities to secure the interests. Accordingly, it appears that the expenditure incurred in developing interests in these two countries has no value.
I believe the only subsidiary which is capable of producing a dividend to the company is Bula Oil Canada Limited (“Canada Limited”). This company has a 10% interest in two oil and gas fields which appear to produce monthly royalty cheques of approximately €400. Canada Limited owes the company €13,000 on an inter-company account, and there might be a prospect of receiving a dividend on this. I am presently liaising with a Canadian Insolvency Practitioner to arrange the Liquidation of Canada Limited, which will involve an application to the Canadian courts to have the company restored to the Register of Companies in Canada.
Al Thamer Establishment (Bahrain)
The Statement of Affairs shows Al Thamer Establishment to be a debtor with a value of €937,500 and a realisable value of nil.
On 26 June 2001 an agreement was signed with the Al Thamer Establishment in Bahrain. The agreement required a payment of $1.5 million to be made to the Al Thamer Establishment by the company. The transaction should have been notified to the Stock Exchange at the time, but the company did not announce it until 6 February 2002, at which time it was stated that the investment was a “refundable deposit”.
The Al Thamer Establishment did not “refund” the money by 27 June 2002. When contacted by the company subsequently, General Kamal of the Al Thamer Establishment said that the $1.5 million payment was not refundable. The company entered into negotiations with General Kamal on the matter, and in February 2003 negotiated a settlement with the Al Thamer Establishment and the company accepted a payment of $375,000 in full and final settlement. The book value of €937,500 shown on the Statement of Affairs represents the Euro equivalent of the remaining monies.
Unpaid Calls
The Statement of Affairs shows unpaid calls (i.e. Shares issued but not paid for) with a book value of €103,992 and an estimated realisable value of nil. This relates to shares which were issued to Mr Yazigi, but for which he did not pay cash for. Mr Yazigi tells me that he paid for the shares by set off of consultancy charges and expenses.
Section 56 Report to the Office of the Director of Corporate Enforcement ("ODCE")
For more background information on Liquidator's Reports to ODCE, please refer to Official Liquidations Update Background.
I submitted my first Section 56 report to ODCE on 6 September 2004, in which I requested an extension of time to progress my investigations. I submitted my second Section 56 report on 15 November 2004. ODCE requested me to submit further Section 56 Reports while they considered my first two reports. Accordingly I submitted my third Section 56 Report on 3 March 2005, my fourth Section 56 on 15 July 2005, my fifth Section 56 Report on 13 December 2005 and my sixth Section 56 Report on 11 May 2006.
My Section 56 Reports to ODCE cover the following individuals who I consider were directors of the company in the 12 months prior to my appointment as Liquidator:
Mr Omar Yazigi, Mr Tom Kelly and Mr Timothy Torrington.
My Section 56 Reports do not cover any directors who had resigned prior to the 12 month period.
I was not relieved by ODCE from the obligation to bring a Section 150 Application in respect of Mr. Yazigi and Mr. Kelly. I was relieved in respect of Mr. Torrington. I issued the Section 150 application against Mr. Yazigi and Mr. Kelly, who did not enter appearances to defend the application. They were restricted by order of the High Court on 4 December 2006 .
Matters for Investigation
As Liquidator, I have a number of statutory duties to fulfill. These duties include investigating the reasons for the company's liquidation and investigating unusual transactions.
One of the transactions I investigated is the investment of US$1.5 million in Bahrain which was made in 2001. ODCE had commenced an investigation into this investment prior to my appointment as Liquidator.
I will be unable to discuss the progress of my investigations with any shareholder or creditor.
As part of my investigations I reviewed payments made by the Company in the relevant period leading up to its liquidation. This review led me to recovering preferential payments of €34,895 which had been received by a creditor of the Company.
Dividend Prospect for Creditors
There is no prospect of a dividend for unsecured creditors.
Prospects for Shareholders
It is clear that the shares in the company have no value.
I would ask shareholders to note that my primary duty is towards the creditors of the company, and I do not have a budget which allows me to send correspondence directly to the shareholders of the company, particularly given that the company had 45,194 shareholders.
Shareholders should note that I will be unable to assist them with any queries which they might have regarding share transfers, replacement share certificates, valuation of shares for probate etc.
Shareholders may wish to note that the Irish Stock Exchange and the London Stock Exchange suspended trading in the company’s shares on 11 April 2002.
Shareholders should also note that I am unable to record changes of address if shareholders move address.
For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or
stafford@liquidation.ie
or
murray@liquidation.ie