Petroceltic rules out EGM vote on debt financing plan

Petroceltic has ruled out holding a shareholder vote on its proposed debt financing round, which is expected to raise around $175m (€160m) by the end of this month.

An EGM, on the matter, had been called for by activist investor, fund manager Worldview Capital Management, which owns nearly 30% of the Dublin-based exploration firm.

The proceeds will go towards paying down existing debt and funding the headline Ain Tsila gas field asset in Algeria.

Worldview has criticised the Irish firm’s ability to repay such debt, saying that it puts the ownership of such company assets as Ain Tsila at risk.

It has also expressed concern over the scale of Petroceltic’s unrestrictied borrowing powers. Petroceltic has taken advice over the need for an EGM on the matter and said that no such meeting is warranted.

The company is due to hold its AGM in Dublin on Friday.

However, even before Petroceltic had made its announcement, yesterday, Worldview called for a second EGM (although it is yet to formally lodge the second request with Petroceltic). The Swiss fund manager is concerned about Petroceltic’s financial reserves and fears “a hurried sale of key assets” will be necessary in order to repay debt.

It now wants an EGM in order to pass a resolution that will see shareholders vote on all proposed material disposals in the future.

In response, Petroceltic noted that – under Irish and London Stock Exchange rules – it is already required to seek shareholder approval, by way of ordinary resolution, for disposals resulting in a “fundamental change of business”.