17th Oct 2013 10:18
LONDON (Alliance News) - Fire East Corp Thursday stepped up its pressure on Urals Energy Public Co Ltd, asking other shareholders in the company to back its push to oust the Urals board and bring forward a shareholder meeting to allow that to happen, even though Urals is now the subject of a takeover offer.
Last month, Urals Energy's two biggest shareholders, Fire East Corp and Alpcot Capital Manangement, launched an attempt to remove all but one of the company's board because they think the company is underperforming. However, they are unhappy that Urals has called an extraordinary general meeting to discuss the proposals on January 27, wanting a much earlier meeting.
Earlier this week, Urals Energy saw its shares jump after it got an offer of 12.25 pence a share from what it described as a "highly credible purchaser with previous Russian operational oil experience." It called on shareholders to reject all the motions by the two holders who called the meeting, warning that it was at risk of a default if one board member is removed. It also questioned the ownership of Fire East Corp, saying it couldn't determine who was behind the shareholder.
In a statement Thursday, Fire East Corp welcomed the takeover offer, but said it shouldn't stand in the way of an EGM and called the timing of the meeting an unreasonable delay. It said that it had also proved to Urals Energy that Fire Energy is wholly-owned by Russian Oleg Makhno, who it says has a strong track record in managing oil and gas companies.
Fire East Corp also set out its reasons for wanting to oust the Urals Energy board, saying it wants the company to boost production, put its refinery on full capacity, cut what the shareholder calls unreasonably high operating costs, and lower its general and administrative costs, which Fire East claims are nearly four times the level of capital expenditure since 2008. It also wants Urals to put in place a mergers and acquisitions strategy to optimise its assets and drive shareholder value.
"To date we have received written confirmations and irrevocable undertakings supporting the change of the board from shareholders representing over 25.2% of the issued share capital of the company, bringing the total support for the resolutions proposed at the EGM to over 43%," Fire East Corp said in a statement.
"This level of support is a clear indication of the strength of feeling amongst ordinary investors and their clear desire to see a change of leadership," it added.
Urals Energy shares were trading down 4.1% at 8.15 pence Thursday morning, having reached a high of 10.65 pence Monday morning after it announced the takeover approach.
By Steve McGrath; [email protected]; @stevemcgrath1
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Urals Energy Plc