Petroceltic says it will ask courts to block shareholder vote
Published 12/09/2015 | 02:30
Irish oil and gas explorer Petroceltic has claimed that an attempt by its biggest shareholder to call a shareholder meeting is "unlawful".
Swiss investor Worldview has issued a notice to Petroceltic shareholders alerting them to an extraordinary general meeting (EGM) due to take place in London on October 5.
However, Petroceltic says the shareholder has no right to call the meeting - the fourth so far this year - because the proposed motions are, in its words, "unlawful".
"Petroceltic's legal advisers have written to Worldview's legal advisers demanding that Worldview formally withdraws its invalid notice of EGM and also that it publicly announces such withdrawal and, at the same time, informs shareholders that they should take no action concerning the invalid notice of EGM or the form of proxy provided with the Worldview circular," the company said in a statement.
Petroceltic said it will go to the High Court in Dublin to block the event if Worldview persists with the plan to hold the meeting.
In its statement, Petroceltic, which is headed by Brian O'Cathain, said a new EGM cannot be held because the resolution proposed have previously been put to shareholders.
However, Worldview, headed by chief executive Angelo Moskov, claimed that an EGM held last Monday by Petroceltic was "self-serving", "misleading and futile".
It alleged that the Petroceltic meeting failed to include two resolutions proposed by Worldview, and that it had voted against all the resolutions proposed, meaning none of them could be passed.
The two sides have been loggerheads for well over a year in an increasingly bitter dispute that Petroceltic says is ultimately aimed at wrestling control of the business, valued at about away from the current management and board.
For its part Worldview says it is seeking to protect shareholder value, including by seeking to prevent the company pledging assets as security for new $175m bond.
"The company's proposed $175m bond is hugely perilous and its inappropriate borrowing ability risks significant and further value erosion," Worldview said.
The dispute, including now multiple and inconclusive shareholder meetings, appears to be moving further away from resolution.
"Given a clear breakdown in the lines of communication and a situation that is rapidly bordering on farce," Goodbody Stockbrokers analyst Gerry Hennigan said in a note.
Petroceltic refused to call a previous EGM, called for by Worldview in July. The Irish company has claimed that Worldview is trying to wrest control of Petroceltic for less than its fair value. It insisted that the fact Worldview has said it will not support any further financings by Petroceltic until the board resigns "demonstrates its desire to gain control of the company without paying fair value, which is to the detriment of the majority of shareholders".
As the high profile scrap goes on, analysts at Davy said some of the company's Italian assets may be becoming more attractive, as regulatory hurdles there look set to be lowered.
"At an $80 long-term oil price, we think Italy contributes 40p per share to our (Petroceltic) group net asset value (NAV) of 189p. We suspect that no value is currently being accredited to this element of the investment," Davy's Job Langbroek said in an investor note.