Energy: Efora is an oil and gas exploration company. Picture: Getty Images/Education Images/Universal Images Group
Energy: Efora is an oil and gas exploration company. Picture: Getty Images/Education Images/Universal Images Group

Minority shareholders in oil and gas exploration junior Efora Energy are spooked. About two months after an arbitration appeal decision in its favour, the company has been silent on its ability to recover funds from its former partner.

Efora — in its previous corporate guise as SacOil — has in the past been a controversial investment that has generated unflattering headlines for its main shareholder, the Public Investment Corp.

In late November 2019 Efora announced that its appeal of an earlier arbitration judgment in a R115m dispute involving Encha — a former major shareholder and partner — had been successful.

The original judgment had gone against Efora, but the arbitration appeal tribunal reversed this and ordered Encha to pay R75m (plus interest from March 2016) to Efora. The total amount — probably closer to R120m with accrued interest — is significant for a small exploration company like Efora, which has a market capitalisation of around R700m.

Encha was also ordered to pay the costs of the arbitration.

Efora noted at the time "these amounts are now due and payable".

But since then it has failed to issue any updates on the status of the settlement — which has caused fretting among some shareholders who fear the company has again been stalled in a bid to recover the outstanding funds.

Acting CEO Damain Matroos says Efora is still in the process of recovering the funds. "There are various options open to us … once we have clarity we will put that to the market."

At the latest, shareholders should get an official update when Efora issues its final results in May.

Encha is aligned to the Moseneke family and is chaired by Tiego Moseneke, the younger brother of former deputy chief justice Dikgang Moseneke.

Encha invests in technology, energy and property (through listed property group Vukile).

The dispute between Efora and Encha stems from a 2012 agreement whereby the then SacOil paid $10m to Encha to secure oil exploration blocks in the Democratic Republic of Congo along with a service agreement. The deal fell through, and Encha — which stood surety for the amount — was required to repay the funds by the end of February 2016.

For a number of years Encha provided Efora with a certificate that it was in a position to repay the amount, but that fell away when the companies went to arbitration.

Efora impaired the R115m in financial 2019.

One shareholder argues that Efora should have already put Encha on terms or even applied for the company’s liquidation.

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