4th Mar 2016 15:12
LONDON (Alliance News) - Worldview Capital Management SA has failed once again to oust the management of Petroceltic International SA after a fellow shareholder chaired by Robert Adair said it would reject a takeover offer from Worldview.
Petroceltic Chairman Adair is also the chairman of Petroceltic's second largest shareholder, Skye Investments Ltd, which released a statement Friday stating it would not accept an offer from Worldview, the company's largest shareholder, because it is "substantially undervaluing" the company.
Skye have taken the deal off the table by rejecting the offer, sparing the Petroceltic board from making a recommendation after Petroceltic released a statement Thursday that said the company was plagued in so much uncertainty it was not possible to support nor reject the bid.
Worldview, with a 29.6% stake, needed to gain acceptance from a minimum of 90% of the shareholding of the company for its offer to go through. But with Skye's 19.2% stake in the company, the offer can not be approved.
The cash bid made by Worldview was 3.00 pence per Petroceltic share, which only valued the company at GBP6.4 million - a significant discount to its current value despite recent heavy hits to its share price.
Petroceltic shares were trading up 5.8% to 7.20 pence on Friday following the announcement from Skye, giving Petroceltic a market cap of around GBP15.4 million.
Petroceltic failed to provide a recommendation prior to Skye's announcement, publishing a statement Thursday that said it was "not possible to give a firm recommendation" to its shareholders concerning the takeover offer.
Worldview launched a bid for the company after a lengthy battle which included an unsuccessful attempt to oust Petroceltic's chief executive and later making a series of accusations of corruption. The shareholder capitalised on Petroceltic's decision to launch a strategic review of the company back in December, when the severely discounted offer was made.
Worldview had claimed the offer was acceptable because the value of Petroceltic's equity is "close to zero", and has repeatedly highlighted concerns over the company's "precarious, and worsening, financial position".
But that bid is now lost after Skye's announcement Friday morning.
"The company announces its firm intention not to accept the offer which it regards as substantially undervaluing Petroceltic and will not consider any further offers unless significantly increased," said Skye.
Although that offer is now off the table, Petroceltic still has to resolve its financing woes. Petroceltic's lenders are currently extending the hefty debt repayments owed by the company in the hope it can find a buyer, partner or other financing. But the company is already being faced with the current downturn in the market.
Petroceltic Thursday said the strategic review continues, but said there is no guarantee another offer for the company will be made.
The current deadline for Petroceltic to repay its debt, which it simply can not do, is Friday. Petroceltic is hoping to secure yet another extension from its lenders, but has not yet released a statement concerning the deadline.
"Should the company be unable to secure further waivers from its lenders, it may lead to the withdrawal of the financial support of the lenders and the requirement for the company to make full repayment of its senior bank facility, which the company is not currently in a position to satisfy," said Petroceltic Thursday.
Although Petroceltic's cash balance stands at USD33.4 million, USD26.4 million of that is held in local currencies and is not readily convertible - giving it an effective cash balance of only USD7.0 million.
Its Senior Debt Facility is to the tune of USD230.0 million.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews. Updated by Joshua Warner; [email protected]; @JoshAlliance
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