International Oil and Gas Tech Ltd Litigation Update (1311R)

TIDMOGT

RNS Number : 1311R

International Oil and Gas Tech Ltd

22 October 2013

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

22 October 2013

INTERNATIONAL OIL AND GAS TECHNOLOGY LIMITED

(the "Company")

LITIGATION UPDATE

The Company announces that QOGT Inc ("Quorum"), which commenced proceedings against the Company on 16 January 2012, has given notice that it is amending its proceedings for wrongful termination of the original investment management agreement by withdrawing the largest element of damages claimed against the Company, which related to the management share options ("MSOPs"). This part amounted to approximately US$9.2 million of the original amount claimed of approximately US$15.2 million. Note that the Company has consistently described the damages claimed by Quorum as "speculative and far-fetched".

The damages originally claimed against the Company fall into three heads of loss:

   (i)            Lost notice period; 

(ii) Lost transaction fees and other fees from future investments and fundraises by the Company; and

   (iii)          Losses arising in respect of MSOPS granted by the Company to Quorum. 

The Company has always maintained that items (ii) and (iii) above were comprised entirely of consequential losses and therefore irrecoverable as a matter of English law. Furthermore, the manner in which item (i) was calculated by Quorum also includes consequential losses, in that the calculation of loss assumed that (a) further fundraises and increases in the net asset value of the Company would have taken place during the three years of the notice period and (b) Quorum would have been paid an increased management fee in respect of such increases.

Further, the Company has always maintained that, notwithstanding that such consequential losses are not recoverable as a matter of law, the assumptions that were used by Quorum to calculate the losses were false. These assumptions include the past performance of other funds managed by the Quorum group. Documentation already disclosed by Quorum has demonstrated that its claimed track record was incorrectly calculated in the pleadings.

The Company calculates that the only amount of damages that would not be considered to include consequential losses concerns the three year notice period calculated by reference to the net asset value of the Company as at the date of termination. This would amount to approximately US$ 3.4 million. However, the Company continues to receive clear legal advice that the termination of Quorum's contract was lawful and proper and therefore no liability arises to pay even this amount.

Solicitors to Quorum assert that the MSOPs part of the damages claimed is only being withdrawn because the Company has insufficient assets to satisfy such damages. They assert that Quorum believes that the assets of the Company are not worth the amount originally claimed and so a sale of the assets of the Company would be insufficient to meet the amount of damages.

The Company considers that this assertion is factually incorrect as the net assets of the Fund far exceed even the larger amount originally claimed. Further, it is confident, based on recent offers to purchase certain of the Company's assets, that it would be able to effect a sale of one or more assets to meet even the full amount originally claimed by Quorum.

Finally, the Company considers that the explanation for withdrawing the claim is disingenuous. It is a clear attempt to avoid meeting any order for wasted costs that the Company may now seek to make against Quorum in respect of work undertaken in respect of the withdrawn heads of loss.

FOR FURTHER INFORMATION

Linton Capital LLP

David Sefton

Tel: [phone]

Numis Securities Limited

Nathan Brown

Tel: [phone]

NOTES TO EDITORS

International Oil and Gas Technology Limited ("IOGT") is an authorised closed-ended investment company incorporated in Guernsey. IOGT invests expansion capital into companies that provide services and technology to the upstream oil and gas industry. These companies have proprietary and proven technologies, services and/or processes that can be deployed more rapidly or on a larger scale through the introduction of growth capital. Such companies are likely to have recurring annual revenues of between US$5 million and US$25 million, positive EBITDA and/or significant working capital, and strong management teams. IOGT was admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange on 7 January 2008. Its stock market EPIC is OGT.L. Further information can be found at www.international-ogt.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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