An $85 million dividend and a deal to sell a stake in aging North Sea oil wells for one dollar has landed an Italian financier in a London lawsuit against Abu Dhabi’s biggest utility.
(Bloomberg) — An $85 million dividend and a deal to sell a stake in aging North Sea oil wells for one dollar has landed an Italian financier in a London lawsuit against Abu Dhabi’s biggest utility.
Francesco Mazzagatti, the CEO of Viaro Energy Ltd., is accused of orchestrating a move to deprive partner Abu Dhabi’s Taqa of millions of dollars by paying out a dividend just before selling a share in the oil wells in December 2020. Mazzagatti denies the claim saying the dividend freed up the company from any future claims.
“The dividend was an asset-stripping transaction designed to prejudice” creditors, lawyers for Taqa said in a court filing.
Mazzagatti shocked oil market watchers with a string of acquisitions off the Scottish coast including the £247.5 million ($320 million) purchase of UK-listed RockRose Energy Plc in the space of just 15 months. The United Arab Emirates-based financier previously brokered oil deals in the Mediterranean before pivoting to pursue North Sea assets.
The London lawsuit involves a souring partnership between RockRose and the state-run utility known as Taqa in the North Sea oil fields. Taqa says a RockRose unit owed at least £110 million in funds needed to pay for its share of decommissioning costs but struggled to pay up. It brought the claim after the Viaro-owned firm then declared the $85 million dividend.
The two are fighting over the purpose of that dividend. Taqa’s lawyers say the dividend, which was used to write off inter-company loans was at an “undervalue,” saying it was actually designed to put the funds out of reach. Viaro counters the payment was needed to free the company from its liabilities before it was sold for $1 to an entity backed by Fujairah, another emirate in the UAE.
The relationship with Taqa over the future of the oil field had deteriorated through the fall of 2020, with Viaro’s lawyers bemoaning “the animus which had apparently infected Taqa’s commercial decision-making at the UK management level.”
Viaro’s stake was sold to Fujairah on the same day as the dividend was declared.
Mazzagatti’s deal for RockRose in September was his largest acquisition but the court documents released this week reveal that Viaro only acquired the UK oil operator after taking more than £200 million of loans from RockRose itself. The firm had lined up financing from two members of the Abu Dhabi royal family before switching to take the loans from the target company.
The two royals, Sheikh Thiab Bin Khalifa Al Nehayan and Sheikh Zayed bin Suroor bin Mohammed Al Nahyan, were intending to provide two £250 million facility arrangements to fund the RockRose deal as late as July.
Instead, no sums were drawn down.
Mazzagatti “used the assets of RockRose and its subsidiaries to fund, directly or indirectly, the takeover of RockRose itself,” Taqa’s lawyers said.
Mazzagatti owns more than 96% of Viaro Energy Ltd., and his ex-wife Nadia Al Matrook, a Bahraini national, owns the remainder, according to the filings.
Lawyers for Mazzagatti and Taqa didn’t immediately respond to requests for further comment.
–With assistance from Luca Casiraghi.
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