27th May 2014 14:49
LONDON (Alliance News) - Petroceltic International PLC Tuesday responded to calls by Worldview Capital Management LLP for shareholders to stand against plans to bring a representative of Dovenby Capital Ltd onto is board as part of a planned USD100 million placing with institutional investors.
The oil and gas exploration, development and production company - with interests in the Middle East and North Africa and producing assets in Egypt and Bulgaria - said resolutions asking for voters to set aside their pre-emption rights in order for the company to place 37.9 million shares at roughly EUR0.3125 each with institutional investors and raise USD100 million is in the interests of the company.
"The board of Petroceltic considers the passing of the extraordinary general meeting resolution, and the completion of the placing to be in the best interests of the company and its shareholders as a whole and will continue to seek to engage with Worldview in relation to the matters raised," it said in a statement.
The company announced the placing plans on May 16 and noted that as part of the deal, Dovenby Capital will invest GBP30 million, becoming a new strategic shareholder. Dovenby is an investment company led by Ahmad Fuad, an experienced Malaysian oil and gas industry specialist, Petroceltic said. Fuad served as deputy chairman of Bumi Armada Bhd until his retirement in June 2013. Bumi Armada is a Malaysia-based international offshore oil field services provider.
Petroceltic said the proceeds will be used 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 Capital Management, an investment management group based in Switzerland, UK and the USA which controls more than 17% of Petroceltic, wrote a letter to shareholders on Tuesday urging them to stand against the plans.
It said that the process will 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 the Board of Petroceltic has 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 Ahmad Fuad of Dovenby Capital has 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.
"Insufficient information has been provided to shareholders about the new investor, its principals, the strategic value and benefits that it brings to the company and why collectively this warrants shareholder dilution. Shareholders deserve to know more," Worldview said in a statement.
Worldview said it believes its concerns are shared by a number of investors, and it already has 19% of shareholders ready to vote against the plans at the extraordinary general meeting on June 9.
Petroceltic shares were down 2.2% to 157.50 pence on Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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