Sunday 23 April 2017

Providence plot: Tony O'Reilly Jnr threatened with investor revolt

Minority shareholders consider petition to remove chief executive in oil explorer

Tony O’Reilly Jr of Providence
Tony O’Reilly Jr of Providence
Gavin McLoughlin

Gavin McLoughlin

Providence Resources chief Tony O'Reilly Jnr has been threatened with an ultimatum by a small group of shareholders.

The company has been informed that if a deal to farm out an interest in its flagship Barryroe field off the Cork coast is not on the near-term horizon by the end of the month, the board will be asked to remove O'Reilly.

The Sunday Independent has learned that the unrest has been driven by a group of private shareholders with a less than 10pc stake in the Irish oil and gas explorer.

The group is considering an attempt to convene an extraordinary general meeting at which shareholders would vote on O'Reilly's position, if a satisfactory conclusion is not reached.

Under the Companies Acts, an EGM can be convened at the request of shareholders holding at least 10pc of the voting rights.

Providence's corporate broker, Joe Nally of Cenkos Securities in London, confirmed the minority revolt, but said he believed there would not be sufficient support for an EGM following discussions with sharehodlers.

"There will be no special resolution because there will be no-one to support it," Nally said, adding that even if there was enough support to put a motion before shareholders, the motion would "be roundly and soundly defeated".

Providence refused to be drawn on the row, instead seeking details of who was involved in the revolt.

The shareholder plot comes at a sensitive time for Providence, whose shares are currently suspended from trading.

The shares were suspended last month after the company was hit by an adverse legal ruling in the UK - a ruling that Providence said could cost it $7m.

Finding a partner to exploit the Barryroe field has been a long-running saga.

In February 2015, Providence announced that, subject to certain closing conditions, it had agreed a deal with an unnamed partner. However, the deal did not proceed as the partner (understood to be Dutch firm Sequa Petroleum) did not meet the conditions.

Providence has deep links with the O'Reilly family. Its roots lie in Atlantic Resources, the company founded in 1981 by Tony O'Reilly Snr.

In 1991 Atlantic was acquired by Conroy Petroleum and Natural Resources, which demerged certain assets into a new company named Providence in 1997.

In London Providence shares have plummeted from 707.5p in the summer of 2012 to 13.75p as of their suspension.

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