8th Apr 2016 11:44
LONDON (Alliance News) - Worldview Capital Management has bought up more of Petroceltic International PLC's outstanding debt just days after the board of Petroceltic advised shareholders to accept a takeover offer from Worldview.
Via its Worldview Economic Recover Fund, Worldview had previously bought up a 69% interest in Petroceltic's senior bank facility, before then disposing of just over half of that to an unnamed third party investor, leaving it with a 37.4% stake, equal to around USD74 million of the total USD235 million owed by Petroceltic under that facility.
On Friday, Sunny Hill, a company wholly owned by Worldview, said that it bought a further 30.56% of Petroceltic's outstanding indebtedness at a discount to face value. As a result of this, it now has a 68.0% stake in the senior bank facility, equal to around USD159.8 million of the total owed.
On Wednesday, the board of Petroceltic advised shareholders accept an offer from activist investor Worldview, even though the bid was made at an 83% discount to Petroceltic's share price. Petroceltic shares have been suspended since February, and based on its current share price has a market capitalisation of just under GBP15.0 million, considerably higher than the GBP6.4 million valuation of Worldview's offer.
That offer was initially rebuffed, but Worldview then petitioned the High Court of Ireland to protect its investment in Petroceltic. The investor launched a petition under Irish law which protects Petroceltic from its creditors and allows discussions to be held about how the business could be restructured to transform the company into a sustainable operation. This came ahead of a major debt repayment deadline for Petroceltic.
The Irish court then appointed an examiner to Petroceltic. Petroceltic's overall liabilities in early March amounted to USD250.0 million, according to the company. On Wednesday, Petroceltic said that while it is possible a potential buyer of the group would agree to discharge any outstanding liabilities, this is unlikely to occur.
More likely, according to advice Petroceltic has received, is any proposals put forward under the examinership process in Ireland will result in the restructuring of Petroceltic's outstanding liabilities and provide for any outstanding shares in the company to be cancelled for no consideration.
Due to this, Petroceltic advised shareholders to accept the takeover offer from Worldview.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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