Thursday 22 February 2018

War of words as Petroceltic shareholder row escalates

Brian O'Cathain, Chairman of Petroceltic
Brian O'Cathain, Chairman of Petroceltic

Donal O’Donovan

The head of Petroceltic would rather be running his business, including talking to potential merger partners, than dealing with the “distraction” of an increasingly bitter shareholder row, he has told the Irish Independent.

Petroceltic issued a blistering response to calls by its biggest shareholder for a major shake up of the company – including the ousting of chief executive Brian O’ Cathain.

“Don’t let Worldview destroy your company,” Petroceltic urged shareholders in a statement issued ahead of an extraordinary general meeting (EGM) on February 25.

Worldview, which owns 29pc of Petroceltic, demanded to EGM and is locked in an increasingly bitter row with the management.

Worldview wants shareholders to support motions, including to oust Brian O’ Cathain.

It wants Maurice Dijols, an oil industry veteran, appointed as ceo and to have its own founder Angelo Moskov to the Petroceltic board as non-executive director.

It is also pushing for Petroceltic to adapt a new business strategy.

Yesterday, it an unusually blunt reply circulated to shareholders Petroceltic accused Worldview of attempting a takeover of the business, without making an offer for its shares, and said the move could harm the business.

The Worldview proposals, if carried, would leave the Swiss investor a majority of board seats, and mean there were no independent financial expertise at director level, according to Brian O’ Cathain.

 “Worldview’s attempt to take control of Petroceltic risks serious damage to the Company’s North African assets and their proposed technical strategy for Algeria and Egypt is flawed,” the company said.

Worldview’s proposal to boost production is “technically unrealistic,” according to the statement.

Brian O’Cathain said Worldview’s call to rapidly speed up development work in Algeria and boost production at its Egyptian wells was “laughable.”

The ceo said he has the backing of the “vast majority of shareholders” he has spoken to, including Robert Adair who owns the second biggest stake.

Worldview however, said it stands firmly behind its plans for Petroceltic.

“Without radical change of strategy, the Company is going to run out of money very soon,” the company said.

Proposal to accelerate production and reduce costs are “wholly feasible from both a technical and regulatory perspective and simply reflect industry best practise,” the firm said. The Swiss firm rejected claims it is trying to gain control of Petroceltic and reiterated its wish to replace senior managers.

“Brian O’Cathain and his management team only have a negligible shareholding in the company. We re-iterate our position that management are over-remunerated, mediocre and complacent.”

Worldview said it will look to expanded a legal claim currently before the High Court.

The scene is set for a stormy EGM and the highly charged atmosphere could be complicated by a new takeover offer.

Dragon Oil dropped a €665m takeover bid for Petroceltic last year because of falling oil prices. Brian O’Cathain told the Irish Independent that Dragon could revive its merger plans, though the two sides are “not in discussions today”.

If Dragon Oil does not renew its approach merger and acquisition (M&A) activity in the sector is set to increased, and Petroceltic may be part of that,  Brian O’Cathain said.

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