11th Feb 2015 18:31
LONDON (Alliance News) - Worldview Capital Management SA, which holds a 28% stake in Petroceltic International PLC, Wednesday hit back in the spat with the the oil and gas exploration, development and production company, accusing it of making a statement consisting "largely of baseless propaganda".
A bitter exchange has developed between the two companies, with Worldview's latest statement coming just hours after Petroceltic urged shareholders not to allow Worldview to "destroy" the company. Worldview had on Monday said it would not support any further capital raises for the company while Petroceltic Chief Executive Brian O'Cathain remains on the board. It also presented a turnaround plan to other shareholders.
Urging fellow shareholders to vote for its proposals, Worldview on late Wednesday said it is "confident" that Petroceltic will run out of money "soon" without a "radical change of strategy". Worldview, which is Petroceltic's largest shareholder, also defended its plans to accelerate production while reducing pre-production capital expenditure in Algeria, calling them, "wholly feasible". In addition, it disagreed with Petroceltic's claim that it is trying to take control of the company.
Separately, Worldview said it will seek to "modify" its existing claim in the High Court over a "failure to conduct a corporate and strategic review of the business in breach of the shareholder agreement between Worldview and Petroceltic". It wants the claim to "include a number of further breaches to the agreement that have arisen from statements within Petroceltic's circular to shareholders on January 28, 2015".
"These regard Petroceltic's proposed resolution to appoint two additional independent, non-executive directors, which would take the total number of directors on the board to eight," according to Worldview. "This is in breach of the agreement, which limits the total number of directors to seven."
Worldview also took issue with Petroceltic's opinion that Don Wolcott, the former chief executive of Ruspetro PLC, and Joe Mach, formerly a non-executive director at the same company, are not independent directors.
"This is also in breach of the agreement, which expressly provided that Mr Wolcott and Mr Mach be appointed as independent, non-executive directors," Worldview added.
Wolcott and Mach were appointed to the Petroceltic board last July, recommended as directors under an agreement with Worldview.
Earlier on Wednesday, Petroceltic had reiterated a call for shareholders to vote against the resolutions proposed by Worldview in the extraordinary general meeting scheduled for February 25.
On January 9, Petroceltic received a requisition from Worldview to call an extraordinary general meeting to remove O'Cathain from the board and have him replaced with "an industry veteran who brings an outstanding track record of delivering success and good governance".
Worldview has previously said that Maurice Dijols, the former president of the Russian operations of US-based oil services group Schlumberger Ltd, should join the Petroceltic board as an independent non-executive director alongside Angelo Moskov, a founder partner and director at Worldview.
In January, Petroceltic said it would not consider electing Moskov as an independent director of the company, as he is the chief executive of Worldview, and therefore would not consider Dijols due to his link to Moskov, adding that neither meets the board requirements laid out by the company, claiming Worldview was trying to takeover the company without paying shareholders a fair price for obtaining control of the company.
On Monday, Worldview claimed Petroceltic's production levels were lower than they should be, had a inefficient cost structure and called the leadership "complacent, mediocre and over rewarded", pointing the finger at O'Caithain as the main reason for the company's failings.
Worldview went on to say it would "eliminate the need for new capital by working producing assets to their potential, stop wasteful capital expenditure, and get Algerian gas flowing sooner and with lower pre-production spend," but said it would only be possible if O'Caithain was voted off the board by shareholders.
In its response earlier on Wednesday, Petroceltic said Worldview's "proposed technical strategy for Algeria and Egypt is flawed", adding that it is "not feasible" and noted that similar proposals have been considered and rejected by the board before.
Petroceltic wants shareholders to vote in favour of the company's resolutions to elect two new independent non-executive directors, Neeve Billis and Nicholas Gay and against Worldview's call to remove O'Caithain from the board and to elect Dijols and Moskov.
By Joshua Warner; [email protected]; @JoshAlliance
Update by Samuel Agini; [email protected]; @SamuelAgini
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