Sunday 25 September 2016

New front opens in Petroceltic war as shares are suspended

Published 08/03/2016 | 02:30

Brian O'Cathain, CEO Petroceltic
Brian O'Cathain, CEO Petroceltic
Angelo Moskov

Shares in embattled exploration firm Petroceltic were suspended on the stock exchange yesterday after its largest shareholder last week petitioned to have an examiner appointed to the group.

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Petroceltic has been on life support provided by its lenders, receiving regular, rolling waivers on debt terms.

But the company said that while it had substantially agreed a fresh waiver with those lenders that was due to come into force last Friday and last until March 18, the agreement wasn't concluded in light of the examinership petition.

The latest twist in the long-running dispute between Petroceltic and its single biggest shareholder, activist investor Worldview, means that the Irish group's future is looking increasingly fragile.

Petroceltic, whose chief executive is Brian O'Cathain, has just under $218m (€199m) in debt under a senior bank facility. Management have been exploring a potential sale of the business since December.

A full hearing of the examinership petition by Switzerland-based Worldview, which is headed by Angelo Moskov, is set for April 4 at Dublin's High Court.

A spokesman for Petroceltic said the examinership documents were only received by the company yesterday afternoon.

Worldview owns just under 30pc of Petroceltic, and has frequently levelled accusations of strategic and corporate governance failures at the Irish company. Petroeltic has consistently denied those allegations.

Worldview has also previously attempted, and failed, to have Petroceltic management removed.

On February 26, a unit of Worldview said it was considering tabling an €8m offer to buy Petroceltic, and claimed that there was now zero equity value remaining in the Irish company given its precarious financial position.

"The company is actively engaged with its senior lenders to determine their position in the light of the petition," Petroceltic said in a statement yesterday.

It added that given the "significant uncertainties" in relation to its financial circumstances, it had applied for its shares to be suspended in Dublin and London "until such time as the uncertainties can be determined". Petroceltic is developing the Ain Tsila gas field in Algeria, in which it owns a 38.25pc stake. Gas is expected to start flowing from the field in 2017.

Petroceltic expects Ain Tsila to produce about 2.1 trillion cubic feet of gas sales during its 30-year lifespan.

The field is about twice the size of the Corrib gas field off the coast of Ireland.

It also has assets in Egypt. It has a 100pc-operated interest in 12 onshore producing fields in the Nile Delta. The assets have been included in Petroceltic's ongoing strategic review.

It was reported at the weekend that Petroceltic had received an offer for its producing Egyptian assets from a company formed by former Tullow Oil executives, T5.

Petroceltic would be able to use proceeds from a sale to cut its debt and provide a valuable lifeline.

However, the company declined to comment on the reports yesterday.

Last month, Petroceltic finalised the sale of its exploration interests in Egypt to Edison International for about $9.5m in cash.

With almost a month left until the examinership petition is heard, Petroceltic now has interim court protection from its creditors.

The big players in Petroceltic

Brian O'Cathain

A geologist, Brian O'Cathain has previously worked with oil majors including Shell, where he was primarily involved with business aspects such as acquisitions, divestments and corporate strategy.

Immediately prior to joining Petroceltic in 2007, Mr O'Cathain (56) was the chief executive of Afren. Before that, he was the managing director of Tullow Oil's international business.

A keen hill-walker, the Belfast native studied at the University of Bristol between 1981 and 1984 and left there with his degree in geology.

Angelo Moskov

A former Deutsche Bank executive, Bulgaria-born Angelo Moskov (48) now heads Worldview Capital Management, which he founded in 2011.

He's been heaping pressure on the Irish company for nearly two years now.

Prior to working at Deutsche Bank from 1997 to 2003, Mr Moskov had worked for Morgan Stanley as an equity trader, and also at Goldman Sachs as an equity analyst.

He has an MBA from the University of Chicago, and degrees from the Whitman College and the Institute for World and National Economy in Bulgaria.

Irish Independent

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