Worldview Capital Management: Petroceltic Shareholders Urge Opposition to EGM
LONDON, May 27, 2014 /PRNewswire/ --
Worldview Capital Management ("Worldview"), an investment management group based in Switzerland, the UK (FCA authorised) and the USA, has today urged shareholders to vote against the wholly unjustified removal of pre-emption rights at the forthcoming Extraordinary General Meeting of Petroceltic International plc ("Petroceltic" or the "Company") on 9 June 2014 (the "EGM").
The Board of Petroceltic (the "Board") published a circular dated 16 May 2014 (the "Petroceltic Circular") convening an EGM to consider a resolution to disapply statutory pre-emption rights of existing shareholders (the "Resolution") in connection with a proposed conditional placing of up to 37,940,000 new ordinary shares to raise approximately $100 million (£59.7 million) at a price of 157p per share (the "Placing").
Fully one half of the Placing, representing up to 8.88% of the Company's issued share capital, was allocated to Dovenby Capital Limited ("Dovenby"), a British Virgin Islands company which is described in the Petroceltic Circular as being "an investment company led by Dato' Ahmad Fuad Bin Md Ali" ("Mr Fuad", or "Dato' Fuad"), with Dovenby entitled to board representation for so long as it holds more than 8% of the Company's issued share capital.
Worldview gives the following message to shareholders in respect to the EGM:
DON'T allow your Company to remove your pre-emption rights, dilute your shareholding and, without appropriate forewarning or background information, allow an unknown new shareholder onto the Board of YOUR Company!
DO ensure your pre-emption rights and shareholder controls are properly protected!
Worldview therefore urges shareholders to vote against the Resolution for the following key reasons and views:
- Abuse of Shareholder rights
The Placing represents an abuse of fundamental and statutory pre-emption rights to the detriment of existing shareholders by granting preferential investment terms and an unjustified level of influence to a single new shareholder, Dovenby. - The Company refused placing terms at a higher price with preemption rights protected
The Board did not disclose to shareholders, nor has yet explained its reasons for rejecting, an offer by Worldview effectively to underwrite the Placing at a higher price which would have respected pre-emption rights. - What strategic value? A change of strategy?
- All that the Board has publicly disclosed to shareholders in respect of Dovenby principal Dato' Fuad at the time of the Placing is that "he is an experienced Malaysian oil and gas industry specialist who served as deputy chairman of Bumi Armada Berhad until his retirement in June 2013". Bumi Armada Berhad is said by the Board to be a "Malaysia-based international offshore oil field services provider". We therefore question whether Mr Fuad has relevant upstream experience sufficient to be a true strategic investor, warranting a seat on the Board and the removal of pre-emption rights for existing shareholders.
- A joint committee will be established between Dovenby and the Company with a view to exploring the possibility of a further strategic alliance to jointly seek additional oil and gas projects. Does this represent a departure from the existing and clear Company strategy and geographic focus? Worldview asks if shareholders, in voting on the Resolution, effectively are also voting to approve a new strategy which has not been adequately explained? - Poor Corporate Governance - Insufficient time, information and due diligence
- The manner in which the Board has conducted the Placing has effectively turned corporate governance on its head, allowing the Board to choose its preferred shareholders rather than shareholders choosing their board.
- We believe insufficient due diligence results have been presented to existing shareholders on the new investor and the haste with which the Placing was conducted has not been adequately explained.
- Insufficient information has been provided to shareholders about the new investor, its principals, the strategic value and benefits that it brings to the Company and why collectively this warrants shareholder dilution. Shareholders deserve to know more. - Shareholder opposition
We believe these concerns are shared by a number of institutional and private shareholders of Petroceltic, with already 19% of shareholders intending to vote AGAINST the Resolution.
Worldview Capital Management Partner and Chief Executive Officer, Angelo Moskov, said:
"As a shareholder in Petroceltic since 2011, Worldview has always believed in the long term value of the Company and has been supportive of Company management. We are not supportive however of the resolution proposed at the forthcoming EGM to disapply statutory pre-emption rights of existing shareholders in connection with a proposed conditional placing.
Our concerns over the lack of corporate governance, abuse of shareholder rights, insufficient due diligence and insufficient information provided about the new strategic investor have not been sufficiently addressed by the Company. We expect shareholders will share our grave concerns and will join us in a vote against the resolution."
Notes to Editors:
Worldview Capital Management is an investment management group based in Switzerland, UK (FCA authorised) and the USA, which controls votes of more than 17% of the share capital of Petroceltic International plc, company whose shares are listed on the AIM market of the London Stock Exchange (LON: PCI) and the Enterprise Securities Market of the Irish Stock Exchange.
Enquiries:
Hudson Sandler: Charlie Jack, Julia Cooke, +44(0)20-7796-4133
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