Friday 21 October 2016

Providence rebel leader to back fundraising plan next week

Published 10/07/2016 | 02:30

Tony O’Reilly Jr of Providence
Tony O’Reilly Jr of Providence

The leader of a group of private shareholders at Providence Resources that have been heavily critical of Tony O'Reilly Jr's stewardship of the firm is to vote in favour of the company's planned capital raise next week.

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Richard Jennings of equity research house Align Research said the plan was "obviously in the best interest of all the shareholders".

"Whether or not Tony O'Reilly Jr is the man to continue to drive the company forward is obviously open to debate amongst various shareholders.

"I would say everybody in our small shareholder group continues to believe that the company would be better with a new CEO," Jennings told the Sunday Independent.

He said the prospect of taking what is known as a derivative action (where a shareholder brings a claim against the company for an alleged wrong not being pursued by directors) over the firm's disclosure to shareholders of payments due to drilling contractor Transocean, was "still live".

"But it doesn't behove us to destabilise the capital-raising EGM," he added.

"I would say we're looking to see whether Tony O'Reilly does what he has obviously told the new investors: that he believes he can deliver." ­ Providence shareholders have been battered by falling oil prices and the long search for a partner to help the firm get oil out of the ground at its flagship asset off the Cork coast.

But raising capital would give the company a platform on which they could move forward, by paying off Transocean and a debt facility with Melody Finance.

O'Reilly told the Sunday Independent last week that the fundraising was a "new lease of life". Shareholders will vote on the plan - to raise €62m via a share placing and up to €4.84m via an open offer - on Thursday.

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