Business Irish

Thursday 14 December 2017

Petroceltic 'unsaleable' claims Worldview ahead of EGM

Brian O’Cathain, chief executive of Irish explorer Petroceltic
Brian O’Cathain, chief executive of Irish explorer Petroceltic
John Mulligan

John Mulligan

Embattled Irish exploration firm Petroceltic is "unsaleable" because of its current strategy, the head of activist investor Worldview, Angelo Moskov, has told the Irish Independent.

Mr Moskov also said he's confident that Worldview will succeed in ousting Petroceltic's chief executive, Brian O'Cathain, at an extraordinary general meeting next week.

Worldview and Petroceltic have been at loggerheads since last year, when the Swiss investment firm began questioning the Irish company's corporate governance and strategy.

The bust-up has become increasingly acrimonious.

Dragon Oil had proposed to buy Petroceltic before Christmas in a €665m deal, but later pulled the planned takeover.

Mr O'Cathain has recently claimed that it's possible Dragon Oil could return with another offer. "Contrary to what Brian is suggesting… we believe the company in its current proposed strategy is unsaleable," said Mr Moskov.

Worldview has accused Petroceltic - which has assets in countries including Egypt, Algeria and Iraq - of spending too much money on developing its projects, and spending money in the wrong places.

It has claimed that Petroceltic has been dogged with poor rates of production and has an inefficient cost structure. It has also claimed that Mr O'Cathain is the "main architect" of Petroceltic's "failing strategy".

Worldview is also trying to have Mr Moskov and oil industry veteran Maurice Dijols appointed to the Petroceltic board next week as non-executive directors.

Petroceltic has claimed that Worldview, whose investors are drawn from regions including the Middle East and the US, doesn't properly understand its business or the technical aspects of its assets and is trying to gain control of the company.

It has insisted that Worldview's attempts to take control of Petroceltic "risks serious damage" to the Irish company's north African assets.

Yesterday, Petroceltic rallied the support of high profile corporate governance advisers as it tries to see off the challenge from Worldview.

It said three shareholder advisory groups had told Petroceltic shareholders that they should vote against the removal of Mr O'Cathain and against the appointment of Mr Muskov and Mr Dijols.

Two of the advisers have also said Petroceltic shareholders should vote in favour of the election of two directors proposed by the Irish firm.

Mr Moskov dismissed the support from the shareholder advisory groups, including Pirc and Glass Lewis. He claimed those groups were acting "outside their comfort zone".

"Our goal first is to remove people who have sat there for many years and done nothing to stop the company running into the ground," said Mr Moskov.

Mr Moskov said Petroceltic's planned $94m net spend on capital expenditure this year is excessive and questioned where the money will be spent.

"How can management tell me they're spending the money in the right place?"

He said that based on current rates of expenditure, Petroceltic could run out of cash by summer or early autumn. Mr Moskov insisted that the company is now at a stage where it would be unable to secure additional funding because he claimed its credibility has been damaged.

"We will not support any further fundraising," said Mr Moskov. "This will not happen."

If Petroceltic attempted to undertake a fundraising, Worldview would call for another EGM, he said.

Worldview has also claimed that Petroceltic backtracked on an agreement to undertake a strategic review of the business in return for Worldview supporting a $100m share placing last year.

A spokesman for Petroceltic said it rejected the claims.

"Petroceltic strategy has always been to run the company so as to maximise value for all shareholders and it's patently false to suggest the company is unsaleable. We believe Worldview's attempt to take control of Petroceltic risks serious damage to the our North African assets and their proposed technical strategy for Algeria and Egypt is flawed."

Shares in Petroceltic jumped 4.7pc in Dublin yesterday.

Irish Independent

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