Viaro Energy's CEO Faces Lawsuit by Taqa Over North Sea Oil Field Dividend and Deal
Posted 28/07/2023 11:44
An $85 million dividend and a seemingly undervalued deal to sell a stake in aging North Sea oil wells for just one dollar has landed Viaro Energy and its CEO, Francesco Mazzagatti, in a London lawsuit filed by Taqa (Abu Dhabi National Energy Company), Abu Dhabi's biggest utility.
The lawsuit was triggered by a dispute between Viaro Energy and Taqa over the decommissioning liabilities for the Brae oilfield in the North Sea. Taqa claims that a unit owned by Viaro Energy's subsidiary, RockRose, owed at least £110 million for its share of the decommissioning costs but struggled to make the payment. Following this, Viaro Energy declared an $85 million dividend, leading Taqa's lawyers to assert that the dividend was an "asset-stripping transaction" designed to prejudice creditors.
The lawsuit revolves around the purpose of the dividend. Taqa alleges that the dividend, used to write off inter-company loans, was undervalued and meant to prevent the funds from being accessed. Viaro Energy counters that the payment was necessary to free the company from its liabilities before selling it for $1 to an entity backed by Fujairah, another emirate in the UAE.
The relationship between Viaro Energy and Taqa had deteriorated throughout 2020, with Viaro Energy's lawyers expressing concern about the animosity apparent in Taqa's commercial decision-making at the UK management level.
Court documents revealed that Viaro Energy acquired UK oil operator RockRose after taking more than £200 million in loans from RockRose itself. Initially, financing was arranged from two members of the Abu Dhabi royal family, but the loans from the target company were ultimately used.
Francesco Mazzagatti owns over 96% of Viaro Energy, with the remainder being owned by his ex-wife, Nadia Al Matrook, a Bahraini national.
Neither Mazzagatti's nor Taqa's lawyers have yet provided further comments on the ongoing legal matter.