16th Jun 2014 09:35
LONDON (Alliance News) - Petroceltic International PLC Monday said its third-largest shareholder, Worldview Capital Management SA, has now agreed to back its planned USD100 million placing after the company agreed to shake up its board, including allowing Worldview to recommend two independent non-executive directors.
Worldview Capital has a 20.04% stake in the company, making it the third-largest shareholder behind Non-Executive Chairman Robert Adair and Sky Investments, an investment vehicle that Adair is associated with. It had rejected Petroceltic's plans to raise money through a placing.
Petroceltic said it has agreed to reduce its board to seven members, from nine, including at least five non-executives. Chief Operating Officer David Thomas and Chief Financial Officer Tom Hickey will keep their roles, but stand down from the board, it said.
Worldview will recommend two independent non-executive directors to the board, and the other independent non-executive directors will be chosen from amongst the existing Petroceltic non-executive directors.
Petroceltic said it had also agreed to modify the relationship agreement between Robert Adair and the Skye Investments vehicle he is associated, meaning that Skye is no longer obliged to vote in accordance with board recommendations in some circumstances. It didn't detail those circumstances.
"With the support of Worldview, it is now anticipated that the resolution at the EGM to approve the placing will be successful and the placing will complete in accordance with its terms, including the participation in the Placing by Dovenby Capital Limited for GBP30 million," the company said in a statement.
Petroceltic said on May 16 that it intended to raise USD100 million in a placing of 37.9 million shares with institutional investors, at EUR0.3125 each. Dovenby Capital, an investment company led by experienced Malaysian oil and gas industry specialist Ahmad Fuad, would invest GBP30 million, becoming a new strategic shareholder.
Petroceltic said it would use the proceeds to pursue growth opportunities across its existing portfolio and also through new ventures, to bridge funding pending receipt of Sonatrach farm out proceeds, as well as for additional debt availability under the senior secured facility and for general corporate purposes.
However, Worldview called on fellow shareholders to reject the plans, saying the process would remove shareholders' pre-emption rights for an unjustified reason, will dilute their shareholding and, without appropriate warning or background information, bring in a representative of Dovenby as part of the company's board due to it having over 8% of the shareholding in Petroceltic.
Worldview said that Petroceltic's board had not explained to shareholders why it rejected an offer from Worldview which would have effectively underwritten the placing at a higher price and respected pre-emption rights.
It also questioned whether Fuad of Dovenby Capital had relevant upstream experience to be a true strategic investor, warranting a seat on the board and the removal of pre-emption rights for existing shareholders. Worldview added that a committee has been established between Dovenby and Petroceltic to explore the possibility of seeking additional oil and gas projects, a process which may represent a move away from the company's ongoing strategy and geographic focus.
Petroceltic shares were up 0.8% at 157.25 pence Monday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
PCI.L