Friday 27 April 2018

WorldView takes over Petrocelic and two related companies as High Court approves survival scheme

Petroceltic was placed into Examinership last April
Petroceltic was placed into Examinership last April

The High Court has approved an amended survival scheme for Petroceltic International and two related companies which sees the troubled explorer taken over by Cayman-Islands based fund Worldview.

The scheme comes into effect from 6pm on Thursday.

There was no opposition to the modified scheme when it was put before Mr Justice Brian McGovern from 12.30pm on Thursday.

Secured lenders, employees (who will do better under the modified scheme), and other creditors either supported the scheme or adopted a neutral posihtion.

All of the company's senior staff, about 30 people, had voted against the origianl scheme at creditors meetings and later hired lawyers to advance their objections to the scheme.

After negotiations between the sides this week, modificaitons were agreed which will see the employees getting 20pc of entitlements which had been estimated at some €3.6m under "change of control" clauses in their employment contracts, rather than the 5pc originally proposed. 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 Petroluem, 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.

Counsel outlined the scheme provides that the investor will provide up to $100m dollars 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.

 Before Petroceltic International and related companies Petroceltic Investments Ltd and Petroceltic Ain Tsila Ltd 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. 

An independent expert's report,  by Pearse Farrell of Duff and Phelps (Ireland) Ltd, has expressed the view Petroceltic has a reasonable prospect of survival as a going concern provided certain conditions, including securing investor funding and approval of a scheme of arrangement, are met.

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