Petroceltic board too ‘complacent’

Petroceltic’s largest independent shareholder has vowed not to back any further capital raising efforts by the Dublin-based explorer until its board is shaken up and CEO Brian O’Cathain removed.

Petroceltic board too ‘complacent’

Activist investor, Worldview Capital Management, which owns nearly 30% of Petroceltic, has been at loggerheads with the Dublin firm since late last year. It initially opposed Petroceltic’s $100m fund raising/share placing plan last summer, before threatening legal action and calling for an overhaul of the board on the basis of the Irish explorer, allegedly, not following through on certain concessions promised to Worldview in return for its eventual backing of the aforementioned capital raise.

Worldview has since called an EGM — to be held later this month — where it hopes to add another two representatives to the board and unseat current Mr O’Cathain.

For its part, Petroceltic last month urged shareholders to reject Worldview’s resolutions at the upcoming EGM, saying approval of such would have “a negative impact on the board’s effectiveness” by diluting its independence. It also claimed Worldview is only trying to gain control of the business without having to buy it at a fair price.

Yesterday, the Swiss firm had its say and urged Petroceltic’s shareholders to approve its resolutions and “take action to save your company from destruction”. The company added that its vision for Petroceltic would deliver increased profitability via accelerated production levels and an elimination of “wasteful spending”.

In its detailed strategy paper to shareholders, ahead of this month’s vote, Worldview said that under the current management team, Petroceltic is being hampered by poor production levels, overspending (claiming the company currently spends too much money on the “wrong” projects), an inefficient cost structure, slowness in developing key assets and is being held back by a “complacent, mediocre, and over-rewarded” board.

“The leadership is over-remunerated and refuses to recognise its failings, while lacking expertise for the right solutions,” Worldview said.

“Based on numerous interactions with the company’s management over the past year, Worldview has concluded Brian O’Cathain to be the main architect of the company’s failing strategy and principally responsible for the company’s string of corporate governance failings,” it added.

Worldview also believes Petroceltic will run out of cash and require another capital raise this year, adding that it will not support such measures as long as Mr O’Cathain remains in place.

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