Swiss-based activist investor Worldview Capital Management — which controls around 30% of the Dublin-based exploration firm — unhappy with a number of issues, including failure to be sold last year, pace of production and asset development (particularly in Algeria) and investment decisions; is urging shareholders to back its move for a doubling (to four) of its representatives on the Petroceltic board and the removal of Brian O’Cathain as chief executive.
The vote will take place at an egm on February 25.
But, yesterday, Mr O’Cathain said that Petroceltic’s management is confident, but not complacent, regarding the vote; claiming that all of the institutional investors it has talked to have expressed support for the board (which has nominated two more independent directors for election at the meeting), with 80% of retail investors it has canvassed doing likewise.
Analyst reaction also seems supportive, with London-based SP Angel suggesting Worldview is either not being advised appropriately or is being unfair to other shareholders in looking for board representation “far in excess of its existing shareholding”.
Taking into account the social unrest in northern Africa in recent years, the company’s analysts said: “We don’t believe that the management team have underperformed to the extent to which it is alleged by Worldview.
“While things could always have been done better, they haven’t been bad enough to warrant imposition of four directors and the removal of the CEO.”
Petroceltic also yesterday reacted to Worldview’s suggestions that it will run out of cash this year and require another capital raise. The Dublin firm said it has no plans to raise equity capital this year, although it may raise further debt.
“Worldview’s suggestion that the company’s cost structure is unjustifiable ignores the fact that the company has already announced significant reductions to operating and capital expenditure in 2015,” it said.