13th Aug 2015 15:41
LONDON (Alliance News) - Petroceltic International PLC Thursday said it will be holding a second extraordinary general meeting on September 7 to consider a proposal put forward by activist investor Worldview Capital Management Ltd to restrict future asset disposals, and the board urged shareholders to vote against this resolution.
Worldview has requestioned a meeting to table a resolution that proposed Petroceltic should seek approval from shareholders for any material asset disposals which represent 25% or more of the company's revenues, profits, or oil and gas reserves.
Worldview, which has a 19% interest in Petroceltic, claimed Petroceltic had "run out of money" and therefore was placing the key Ain Tsila gas condensate field in Algeria as security for the proposed bond issue, which Worldview described as "perilous to shareholders".
The board of Petroceltic has recommended that shareholders vote against this resolution at the meeting, as it believes that this is "not in the best interest of the company or its shareholders".
It suggested that the resolution is part of an "ongoing strategy" of Worldview's to gain control of the board. It argues that the company is already subject to rules on the disposal of assets, and the proposed resolution is contrary to the applicable standards set out in these rules.
If the resolution is passed it could "adversely affect the company's ability to effect "future disposals, by increasing the conditionality and uncertainty of such disposals, and could also lead to increased transaction costs," Petroceltic said in a statement.
The proper way to remove or restructure the powers of the directors under the articles of association of the company would be to amend the articles, which would require a special resolution that would need to be supported by three-quarters of the company's shareholders voting in a general meeting, Petroceltic said.
Petroceltic had previously convened an EGM for September as requisitioned by Worldview to discuss Petroceltic's proposed bond issue. However, the company said Tuesday last week that these proposals would not be put forward as they do not comply with Irish company law. Petroceltic already had said the day before that it had suspended formal marketing of the bond issue due to volatile market conditions.
Petroceltic has put forward an alternative proposal to limit the borrowing powers delegated to directors by placing a monetary limit on the amount that can be borrowed by the company without further shareholder approval.
Shares in Petroceltic closed up 2.4% at 55.30 pence Thursday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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