Petroceltic board recommends shareholders accept buyout offer
The board of directors of Irish oil producer Petroceltic has recommended shareholders accept an all-cash offer from investor Worldview Capital Management, saying a court examinership was likely to otherwise render the shares worthless.
Worldview, Petroceltic's largest shareholder with 29.6pc, in February made the offer of 3p per share, an 83pc discount to the stock's previous closing price, saying the company's equity value was close to zero given its financial position.
The company, which operates in Algeria, Egypt, the Black Sea and the Kurdistan region of Iraq, has been struggling with low crude oil prices.
In March, Petroceltic was placed in examinership, a process under Irish law akin to Chapter 11 bankruptcy in the United States and administration in Britain.
"The Board of Petroceltic, having regard ...specifically (to) the likely outcomes for Shareholders on conclusion of the Examinership process ... recommends that Shareholders accept the Offer as soon as possible," the company said in a statement.
The board said it was "far more likely" that any proposals put forward under the examinership process would result in the restructuring of outstanding liabilities and "provide for all existing ordinary shares ..to be cancelled for no consideration."