Petroceltic's defends plan to raise funds despite criticism
Independent oil and gas explorer Petroceltic has today defended plans to raise funds adding that some of its latest drilling work in places like Iraqi, Kurdistan and Egypt has failed to produce significant amounts of oil or gas.
The company also said its proposed placing to raise €74m was in the best interest of the company, despite criticism by majority shareholder Worldview Capital Management.
"Petroceltic has always and will continue to uphold the interests of all its shareholders and the board believes that these interests are best served by, inter alia, ensuring a diverse and balanced shareholder base, bringing new and valuable experience into the company and maintaining high corporate governance standards," the company said in a statement.
Worldview, which has increased its stake in Petroceltic to 17pc, had urged shareholders to reject the Irish company's move to disapply statutory pre-emption rights in relation to an upcoming share placing.
An extraordinary general meeting is due to be held by Petroceltic next week to put the motion to shareholders.
Petroceltic told shareholders earlier this month that it plans to raise about £59.7m (€73.6m) via a conditional placing of 37.9 million shares.
Half of that placing, representing 8.8pc of Petroceltic's issued share capital, has been allocated to British Virgin Islands-based Dovenby Capital. Dovenby is headed by Malaysian accountant Dato' Ahmad Fuad Bin Md Ali.
Mr Fuad is also the chairman of Malaysia-based oil field services provider Bumi Armada.
Dovenby will be entitled to board representation at Petroceltic by holding more than 8pc of the company.
"Our concerns over the lack of corporate governance, abuse of shareholder rights, insufficient due diligence and insufficient information provided about the new strategic investor have not been sufficiently addressed by the company", said Worldview chief executive Angelo Moskov.
"The placing represents an abuse of fundamental and statutory pre-emption rights to the detriment of existing shareholders by granting preferential investment terms and an unjustified level of influence to a single new shareholder, Dovenby," Worldview added yesterday.
"Don't allow your company to remove your pre-emption rights, dilute your shareholding and, without appropriate forewarning or background information, allow an unknown new shareholder on to the board of your company," it added.
Worldview insisted that the manner in which the Petroceltic board has conducted the share placing has "effectively turned corporate governance on its head.
"Insufficient information has been provided to shareholders about the new investor, its principals, the strategic value and benefits that it brings to the Company and why collectively this warrants shareholder dilution. Shareholders deserve to know more," it claimed.
Earlier this month, Petroceltic revealed it made a $19m loss in its last financial year after it wrote off $37m related to investments in unsuccessful wells
It posted revenue of $197m in its last financial year and is listed on Dublin's Enterprise Securities Market and London's AIM. It has a market capitalisation of €375m.