6th Apr 2016 07:42
LONDON (Alliance News) - Petroceltic International PLC on Wednesday advised shareholders to accept the takeover offer made by activist shareholder Worldview Capital Management.
Relations between Petroceltic and Worldview, which owns a 29.4% stake in the business, have been frosty since late 2014, when Worldview claimed Petroceltic had broken a corporate governance agreement and called for its chief executive to resign.
Since then it has consistently called for a shake-up of Petroceltic's board and has made a series of accusations about the management of the business.
This came to a head in February this year when Worldview made a bid for Petroceltic at an 83% discount to its share price, valuing the company at GBP6.4 million.
That offer was rejected by Sky Investments Ltd, which is chaired by Petroceltic Chairman Robert Adair and which holds a 19.2% stake in the business, the second-largest shareholder after Worldview.
Worldview then took the step of petitioning the High Court of Ireland to protect its investment in Petroceltic. The investor launched a petition under Irish law which protects Petroceltic from its creditors and allows discussions to be held about how the business could be restructured to transform the company into a sustainable operation. This came ahead of a major debt repayment deadline for Petroceltic.
The Irish court then appointed an examiner to Petroceltic, after which Worldview's Worldview Economic Recovery Fund bought 69% of Petroceltic's outstanding senior debt, before disposing just under half of that to an unnamed third party investor.
On Wednesday, Petroceltic said while it is possible a potential buyer of the group would agree to discharge any outstanding liabilities, this is unlikely to occur. More likely, according to advice Petroceltic has received, is any proposals put forward under the examinership process in Ireland will result in the restructuring of Petroceltic's outstanding liabilities and provide for any outstanding shares in the company to be cancelled for no consideration.
Due to this, Petroceltic advised shareholders to accept the takeover offer from Worldview.
Petroceltic shares are currently suspended.
By Sam Unsted; [email protected]; @SamUAtAlliance
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