22nd Jan 2016 10:22
LONDON (Alliance News) - Petroceltic International PLC could be subject to a takeover offer after an existing substantial shareholder said it may potentially launch an all-cash offer for the company on Friday.
Worldview International Capital Management Ltd already holds a 29.6% stake in the oil and gas company, and said its preparing to make a bid to acquire the remaining issued share capital of the company.
"Worldview would like to emphasise that its evaluation of Petroceltic is ongoing and there can be no certainty at this stage that any offer for Petroceltic will ultimately be made, nor as to the terms of any such offer should one be forthcoming," it said in a statement.
"Shareholders in Petroceltic are reminded that, further to the company's announcement of December 23, 2015, it remains in an 'offer period', within the meaning of the Irish takeover rules," Worldview added.
Although no price or valuation has been mentioned, Petroceltic's market capitalisation currently stands a touch under GBP35.0 million, suggesting Worldview's current stake is worth over GBP10.0 million, with the other shares it may acquire being valued at just under USD25.0 million.
Petroceltic initiated a formal strategic review of the business and its assets back in December as the company continued to struggle to make repayments under its senior bank facility due to a drop in oil prices, reduction in capital investment programmes in Egypt and Bulgaria, and adjustments to reserves.
Petroceltic had not released a statement responding to Worldview's announcement early Friday.
Petroceltic owes USD217.8 million under the senior bank facility, while cash balances amount to USD28.1 million. However, the company also said it had received confirmation from its lenders of their intention to provide further financial support.
Petroceltic has previously said it had received a number of conditional proposals in relation to the sale of the company, but also said it had also received interest about individual assets of the company - giving it options. That kick-started a formal sales process, which Worldview has pounced on.
Worldview would have seen the announcement of a formal sales process as a gift as it has been campaigning aggressively for change at the top of the company, including levelling accusations of corruption and calling, unsuccessfully, for the ousting of the company's chief executive.
Worldview secured support for proposals which had been tabled for an extraordinary general meeting back in October, but that meeting was cancelled by Petroceltic after the company secured an injunction blocking the meeting from the High Court of Ireland.
Alongside being unhappy about the management at the company, Worldview was desperate to block a proposed USD175.0 million bond issue which Petroceltic intended to secure against the Ain Tsila gas project.
Investors seem to be in favour of the potential takeover, with Petroceltic shares trading up 36% to 15.62 pence per share on Friday morning.
In October 2004, Petroceltic's share price hit an all-time high of 224.0 pence, but Petroceltic shares have fallen by around 93% since then.
One of the reasons the share price has risen Friday is because investors were fretting after The Sunday Telegraph reported the company was fighting to survive and had appointed restructuring specialists from PricewaterhouseCoopers to prepare for possible administration - claims that Petroceltic has not directly responded to.
By Joshua Warner; [email protected]; @JoshAlliance
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