16th Jul 2015 12:00
LONDON (Alliance News) - The long-running battle at Petroceltic International PLC reignited Thursday after the company said it has received a letter seeking an extraordinary general meeting from its largest shareholder Worldview Capital Management Ltd, which later said its reasons for calling the meeting centre on the company's proposed bond issue and the borrowing powers its board holds.
The request for a meeting follows on from claims made by Worldview earlier this month that Petroceltic had run out of money, placed a key asset at risk, and was about to conduct a deal with its bondholders that would be "perilous to shareholders". Worldview had already warned it would take "all legal steps" to halt the company's plans.
Officially, the request has been filed by Vidacos Nominees Ltd, of which Worldview is the beneficial owner. According to the company Thursday, Vidacos holds a 26.5% stake in Petroceltic.
In a statement issued later on Thursday explaining its reasons for requesting the meeting, Worldview said the key points it wants to raise are about the bond issue Petroceltic is planning and the borrowing powers held by the board.
At the start of July, Worldview opened a new chapter in its ongoing battle with the management and board of Petroceltic over the company's plans to pledge its "crown jewel" asset as security for a USD175 million bond issue. Worldview had claimed Petroceltic had "run out of money" and therefore was placing its key asset, the Ain Tsila gas condensate field in Algeria, as security for the proposed bond issue, which Worldview described as "perilous to shareholders".
Worldview said the company's bondholders would eventually secure the "world-class asset for a derisory sum". Petroceltic plans to issue the bonds without shareholder approval, which Worldview called "an abuse of the unfettered borrowing powers" of the company and "poor corporate governance by the board".
Worldview said in its later statement on Thursday that it would raise questions about the bond issue, including how the company plans to service the interest on and repay the capital sum of the bond, how the funds raised will be used, and what security has been given to secure the bonds.
It also said it would seek information from the company on its borrowing powers, including questioning whether the power the board holds are appropriate for a listed company and whether they comply with existing corporate governance guidelines and best practice.
On Thursday, Petroceltic said it was taking legal advice in relation to the requisition made by Worldview.
That battle followed on from a previous requisition made by Worldivew for an EGM earlier this year to try to oust Chief Executive Brian O'Cathain, a move which failed after shareholders narrowly supported O'Cathain.
Petroceltic shares were down 4.4% to 86.0375 pence on Thursday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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