I agree they are withholding funds...which no doubt is causing issues for Swala. (noting Swala is free carried for Kito)
Depending on the exact dates referred to or the amounts quoted by each party (or combination of both), this could be anywhere from $500k to $2-$3M by now is my guess.
It also means that Swala has done the work etc, for which Otto and Tata don't want to/wont pay. If Otto pays, its leaves less in the pot for North America.
Although I doubt the reason is solvency, but that's the irony, they are causing the issue in my view. Swala is free carried...again!
I don't understand how you can use something as a reason, when you are the cause of the being able to use that reason in the first place. Is this ethical?, is this and have Otto been transparent? Is this in line with Otto's Code of Conduct?
Trying looking at Otto's reasons for trying to delay Kito in 2016 (See Swala response announcement)...didn't want to drill in 2016, due to funds for other projects, but Swala didn't have those concerns (free carry, again) and wanted to continue on schedule is what I take from their announcements.
No one cant tell me that Otto hadn't forecast their timing and expenditure outlook, surely not. To do so, would suggest poor planning an incompetence. Otto says they want to focus on North America, so reading both parties announcements ties this all up.
There is a dirty big flash banner on thier website which says they are North America focused...LOL Otto Website Flash Banner Way to say 'smack it Africa'.
They might all be really good projects but they have really made a mess of the forecast cash flows and timing. Which means shareholders are not going to get their expectations this year...no where near it. Something has to give, and Otto decided a while ago this would be Kito. Although stopping Kito, doesn't provide enough cash back in the pot, but only reduces the amount required.
Secretary resigns.
CFO leaving the company? - not a resignation?? - Effective 28 Feb 2017.
Then, try thinking about the legal case. Withholding funds to gain leverage in that court case?
Hardly ethical to use one thing to try and force an outcome on another totally unrelated issue.
Paying for work done is one thing.
Resolving an issue is another.
Seems all to obvious what's really going on here. Delay payments for work done, cause solvency issues. Try and win by default by causing the possible downfall of Swala.
I wont pay you unless you do this, or give me this, or do as I say - Is what in the real world?
Appears this may continue for a while. Otto needs to amend statement of claim. Errors/Omissions/Adjustments?
Then slected defendants need to resubmit defenses.
Who knows how long and how much money this will end up chewing over the next year or two.
Huge legal costs to continue for Otto.
I'd say Otto wants to drive Swala to the wall, and then try and use that as a means to get and extend the license further out past 2017...into 2018/2019 or beyond. Once they have some production for a few years.
I'd think their JV agreements have avenues to resolve issues and not withhold fair and reasonable past work undertaken funding? Who has the right to withhold payments for a breach of some other aspect of an agreement?
I know if I have a problem with my rental property, I am not entitled to withhold the rent payments. I have to still pay my way and resolve the issues by the means set out by law, and that does not include withholding past rent to obtain unfair leverage.
If I have a problem with this months power bill, doesn't mean I don't have to pay last months. I pay last months and sort out this months as best I can.
May be I view things in a little simplistic state but transparency is lacking here in my view.
Some interesting points, questionable here.
Otto's Code of Conduct Link
Its important to note within this Otto document, that perception is a measure of it!
Points 1, 2, 3, 4, 8 and 11 make interesting reading.
The full picture is very hard to see, unless you've followed it as closely as I have.
This is my opinion on the sequence of events, what and why things have occurred as they have. Some here will cloud the picture, but I will stick with my view for now.
As always, and I acknowledge that things can and will change as things are made public, but until then its a big question mark here, and a really bad smell.
Good luck to those trying to prop the share price. Its been happening since +4.5 cents ( a few sellers obviously saw and pieced all this way before I did), a few pips lower than the last sale price, eventually getting sold through or removed every time so far.
I guess Tuesday or Wednesday next week there might be news on some of this.
OEL Price at posting:
3.7¢ Sentiment: None Disclosure: Not Held
(20min delay)