Petroceltic staff win payments for backing change of control
THE High Court has approved an amended survival scheme for exploration company Petroceltic International and two related firms.
The scheme sees the troubled explorer taken over by Cayman Islands-based fund Worldview and came into effect from 6pm yesterday.
There was no opposition to the modified scheme when it was put before Mr Justice Brian McGovern yesterday.
Secured lenders, employees (who will do better under the modified scheme), and other creditors either supported the scheme or adopted a neutral position.
All of the company's senior staff, about 30 people, had voted against the original scheme at creditors' meetings and later hired lawyers to advance their objections to the scheme.
After negotiations between the sides this week, modifications to the scheme were agreed.
Employees will get 20pc of payments, which had been estimated at some €3.6m, due to them under "change of control" clauses in their employment contracts rather than the 5pc originally proposed.
The contracted payments fall due if the business changes hands.
They have also been assured the notice provisions of their contracts will be honoured.
On that basis, their lawyer, John O'Donnell SC, said they were not objecting to the modified scheme.
The court was told another modification to the scheme is that Dana Petroleum, following an agreement, will no longer be treated as a creditor of the company and will instead stand outside the scheme.
Seeking approval for the scheme, Michael Collins SC, for Examiner Michael McAteer, said it had also been agreed there will be a change in management of the company and the investor's nominees will be appointed to the board.
Two new directors, including Worldview's Angelo Moskov, along with an alternate director, will be appointed, he said. There will also be a new company secretary.
The scheme provides that the investor will provide up to US$100m working capital to Petroceltic over the next three years and will also subscribe for 150 million new ordinary shares.
Creditors will get 5pc of sums owed and creditors who claimed benefits under change of control clauses would get 20pc. Shares will be cancelled and the business delisted.
Before Petroceltic International and related companies Petroceltic Investments Ltd and Petroceltic Ain Tsila were placed under court protection last March, on the petition of Worldview brought without notice to Petroceltic, its secured debt of $240.8m was bought out at a massive discount by Worldview and Elbrus Capital, another Cayman fund.
Petroceltic later said it would support Examinership but rejected criticism in the petition of the management of the company.