NiQuan's winding-up petition goes to June

NIQUAN Energy’s creditors have until June 3 to decide on their position on the winding-up of the financially-crippled gas-to-liquids company.

Justice Westmin James preside over a hearing of the winding-up petition.

NiQuan’s secured note-holders are to inform the court what option they will exercise under the security arrangements. They are to report back by June 3, or the matter will go to trial on June 25.

NiQuan’s former vice president for global services, David Small, filed the petition on February 1, to recover a $21 million court-ordered payout owed to him for breach of a written separation agreement.

In response to the petition, a commercial bank which holds a short-term note instrument from NiQuan to 20 note-holders from various countries, Republic Bank Ltd, warned any order to liquidate the company “could potentially jeopardise” an attempt to “rehabilitate NiQuan” – which could take between eight and 12 months – to the detriment of creditors.

Also in response, attorneys for seven entities, all financial institutions, and a major contractor, wrote to the court to tell the judge their clients were also creditors to NiQuan "for substantial sums."

"In light of our clients’ interests and the nature of these proceedings, to ensure an equitable and orderly processing of creditors’ claims against NiQuan, we write to give notice of our clients’ interests as legitimate creditors and our instructions are to take steps to secure the preservation of their respective rights and interests that may be affected in the course of these proceedings," the court was told.

Small’s action comes after James ordered NiQuan on September 29, 2023, to compensate him for the breach of his exit agreement.

Small is represented by Freedom Law chambers, led by Anand Ramlogan, SC.

Last week, NiQuan terminated its 75 employees.

NiQuan’s founder Ainsley Gill told employees, “As a direct consequence of the difficulties mentioned above, it is with deep regret that the company’s senior secured mortgage noteholders have been unable to fund the company as we reasonably expected, and as a further direct consequence, the company is now unable to continue to preserve the GTL plant.”

In opposition to the winding-up petition, he said, “While NiQuan is experiencing cash flow difficulties, on a balance sheet analysis, its total assets exceed the value of the debt claimed by Mr Small and the aggregate value of all of its debts owed to its other creditors.”

He also said winding up would “render NiQuan unable to meet current and potential liabilities including any potential liability to Mr Small as a contingent unsecured creditor, by exacerbating issues faced in engaging any loan facilities and/or investments.

“It could also materially affect NiQuan’s ability to pursue its meritorious legal claims against TT Upstream Downstream Energy Operations Company Ltd and the Government…which have the support of NiQuan shareholders, senior secured mortgage noteholders, unsecured noteholders, vendors, suppliers contractors and other material stakeholders.”

Gill’s opposition said the filing and publication of the petition could also potentially lead to the freezing of all NiQuan’s bank accounts, “causing significant damage” to the public perception of the company, and would be “likely to materially impact future commercial viability and opportunities for its business.

“It may lead to the NiQuan business being unable to secure credit from its suppliers and lenders.

“In all the circumstances, the court ought to conclude that it is not just and equitable that NiQuan should be wound up.”

Small, a former independent senator, left the company in November 2021. He contended NiQuan breached a settlement agreement and he was entitled to a total of $18,575,880.40, representing his salary, accrued vacation, ex-gratia payment and a one-time $12.8 million bonus on the financial close of the World GTL plant.

The judge agreed NiQuan had breached the agreement by failing to fulfil its obligations and also ruled there was no condition to prevent the company from keeping to the agreed payment schedule.

In the petition, Small notified several banks and financial institutions – eight in all – of the judgment debt and his intention to petition the court to have NiQuan wound up.