LONDON, Feb. 12, 2020 /PRNewswire/ -- ARCM will vote against Premier Oil's Scheme proposal at the creditors' meetings today as it believes the proposed acquisitions expose the Company and its stakeholders to significant incremental risks. As a majority of creditors have already contractually locked themselves into voting in favour of the Scheme proposal, we would expect that the requisite majorities for the scheme vote will be obtained.
However, and regardless of the outcome of the creditors' vote, the Schemes will not become effective unless they are sanctioned by the Court. The sanction hearing, which is scheduled to take place on 17 March 2020, is not a 'rubber-stamping' exercise and the Court will consider issues beyond the outcome of the vote at the creditors' meetings in determining whether or not to sanction the Schemes.
At the sanction hearing, creditors who object to the Schemes may raise their opposition. Examples of the type of objections that may be raised include issues such as the constitution of varying classes of creditors, and the accuracy and adequacy of the information disclosures made in the scheme documents. Above all, the Court must be satisfied that the statutory requirements have been met, the vote is fairly representative of the creditors concerned, there is no 'blot' on the Schemes, and that the Schemes are fair.
As stated previously, ARCM will vigorously oppose the Schemes and will take all necessary steps to do so, including opposing the sanctioning of the Schemes. As such, ARCM will file with the Court substantial evidence and submissions which it believes will establish that the Schemes, which contemplate transactions that are unprecedented in their proposed application to a solvent company, should not be sanctioned by the Court.
Over the last few months, ARCM, as the Company's largest creditor, has sought to engage constructively with the Company and other creditors to find an appropriate strategy which comprehensively addresses the Company's leverage and 2021 debt maturity. Instead, the Company has opted to pursue a high-risk acquisition strategy in lieu of addressing its highly levered balance sheet.
ARCM first made public its opposition to the proposed acquisitions in its response to the Company's announcement on 7 January 2020. In recent weeks, ARCM has also posed a number of critical questions to the Company's management on various aspects of the proposed acquisitions, answers to which ARCM believes are required to enable stakeholders to properly evaluate the merits of the transactions (available here). To date, these questions remain unanswered. ARCM will continue to pose further questions here over the next few weeks.
SOURCE Asia Research Capital Management (ARCM)