11th Apr 2016 10:48
LONDON (Alliance News) - Petroceltic International PLC on Monday said it hopes to reveal the "best and final offers" for the company and its subsidiaries by early May after the High Court of Ireland formally appointed an examiner to the troubled firm to negotiate potential deals.
Petroceltic's largest shareholder, Worldview Capital Management, submitted an application to the court earlier this year in order to protect Petroceltic from its creditors only moments before the company was due to repay over USD250.0 million of debt.
Worldview launched that petition to the court after its takeover bid for Petroceltic was rejected by another substantial shareholder in the oil and gas firm, Skye Investments Ltd, which is also chaired by current Petroceltic Chairman Robert Adair.
The submission of the petition placed Petroceltic under immediate protection from its creditors, but an examiner has only now been formally appointed to the company after a court hearing was held last Friday.
Michael McAteer of Grant Thornton has been appointed as the examiner to Petroceltic and its subsidiaries, and will now kick-start an examination process. McAteer has already prepared an information memorandum which will be made available to any companies that are interested in investing in Petroceltic and/or its subsidiaries once they have signed a confidentiality agreement.
"It is anticipated that best and final offers for the petition companies [Petroceltic and its subsidiaries], which must be accompanied by adequate proof of funding, will be required to be made by early May," said Petroceltic on Monday.
"The examiner reserves the right to alter or terminate the investment process and to accept or reject any investment offer at any time. No warranties will be given as part of the sale process," the company added.
Importantly, prior to the hearing held last Friday, Petroceltic made a U-turn on the takeover offer made by Worldview and recommended the offer. Skye Investments, the other shareholder that had previously said it would reject and therefore block the offer, also changed its mind and said it would support the offer.
The offer made by Worldview was at a significant discount to Petroceltic's valuation. Worldview's offer for the company is at an 83% discount to its share price and values Petroceltic at around GBP6.4 million, compared to Petroceltic's market capitalisation of GBP15.0 million before suspension of trading in its shares in February.
When Petroceltic chose to back the severely discounted offer last Wednesday, it said it had realised that while it was possible to find a buyer that would discharge the company's hefty liabilities, this was "unlikely to occur", prompting Petroceltic to advise shareholders to accept the deal or face losing their entire investment in the company.
Petroceltic also had said that any proposals made under the examinership process would likely lead to Petroceltic's outstanding liabilities being restructured and provide for any outstanding shares in the company to be cancelled for no consideration.
Importantly, Worldview purchased all of Petroceltic's outstanding debt in several tranches prior to the court hearing late last week, and has since sold some of that debt to an unnamed third party investor. Worldview currently remains interested in around 68.0% of Petroceltic's outstanding senior bank facility, equal to around USD159.8 million of the total amount owed by the cash-strapped company.
Petroceltic's overall liabilities in early March amounted to USD250.0 million.
By Joshua Warner; [email protected]; @JoshAlliance
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