9th Feb 2015 09:47
LONDON (Alliance News) - Worldview Capital Management SA Monday reiterated its call for shareholders in Petroceltic International PLC to vote in favour of removing the company's chief executive and said it has issued a circular which presents a plan on how to turn the company around.
On January 9, Petroceltic received a requisition from Worldview Capital Management SA, which holds a 28% stake in the company, to call an extraordinary general meeting to remove Petroceltic Chief Executive Brian O'Cathain.
Worldview had said it had requested the meeting to remove O'Cathain and replace him with "an industry veteran who brings an outstanding track record of delivering success and good governance."
Worldview said it has identified a candidate for the board in Maurice Dijols, the former president of the Russian operations of US-based oil services group Schlumberger Ltd. It proposes that Dijols 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 said it has analysed Petroceltic's strategy and said it has "a clear plan to revive the fortunes of the business in the interests of all shareholders."
The major shareholder said production levels are "considerably less" than what they should be and claimed the board "spends too much on the wrong projects".
It also said that Petroceltic has a "grossly inefficient cost structure," and "is taking an unnecessarily long time to develop its key Algeria project." Worldview said the leadership at the company is refusing to "recognise its failings" and is "lacking expertise", calling the leadership "complacent, mediocre and over rewarded".
"Based on numerous interactions with the company's management over the past year, Worldview has concluded Brian O'Cathain to be the main architect of the company's failing strategy and principally responsible for the company's string of corporate governance failings," said Worldview.
Worldview said it will not support any further capital raises by Petroceltic whilst O'Caithain remains on the board and said it believes the company will run out of cash in 2015. Worldview has identified a funding gap between USD30 million and USD47 million at the end of 2015, which will cause revenue to fall by over 40% in 2015 year on year.
The major shareholder said it has an alternative plan for the company.
"A clear alternative - 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," said Worldview.
The shareholder claimed that the company's Algerian partner would support its plans, and said under its proposals, Petroceltic would get gas flowing in Algeria in 2016, which would contribute USD300 million a year in cashflow, negating the need for further capital raising.
"Worldview is confident that its proposed strategy could be implemented successfully by Petroceltic, provided its proposals to remove Brian O'Cathain from the board and appoint Maurice Dijols and Angelo Moskov as directors are approved by shareholder majority at the extraordinary general meeting," said Worldivew.
The meeting is scheduled to be held on February 25
Worldview also asserted that two existing directors, Joe Mach and Don Wolcott, which represents one third of the board, also support the resolutions proposed by Worldview, and said that they are both independent board members that do not represent Worldview.
Petroceltic has proposed that shareholders appoint two new directors, Nicholas Gay and Neeve Billis, which Worldview has urged shareholders to vote against. Worldview said Petroceltic has only proposed the resolutions "as a means to prevent shareholders from judging the Worldview resolutions on their merit."
In January, Petroceltic sent out a circular to shareholders that presented the company's view on the ongoing dispute, urging shareholders to vote in favour of keeping O'Caithain and voting Gay and Billis to the board, whilst rejecting Worldview's proposals to remove O'Caithain and elect Dijols and Moskov.
Petroceltic shares were down 2.4% to 127.43 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
PCI.L