Petroceltic: Further EGM call ‘waste of time’

Irish exploration firm Petroceltic has criticised calls for yet more company EGMs and has reiterated its view that activist investor Worldview Capital Management’s sole interest lies in eroding the company’s value to a point where it can gain control of the business for less than fair value.

Yesterday saw the latest chapter in the ongoing feud between the companies, with the staging of back-to-back EGMs, requisitioned by Worldview, where shareholders voted on an alteration to the Petroceltic board’s borrowing powers and its power to dispose of company assets.

As it happened, none of the amendments/ resolutions tabled by Petroceltic and Worldview were passed.

Worldview has called for yet another such meeting in London early next month.

The yet-to-be-confirmed October 5 meeting will look at Petroceltic’s postponed $175m (€157m) bond issuance and the company’s borrowing powers.

In a statement, yesterday, Petroceltic described the practice of asking shareholders to vote on resolutions “that are not in the best interests of the company” as a “regrettable waste of time”.

It said it will seek “appropriate legal advice” ahead of granting another EGM.

London 7 September 2015: Worldview Capital Management ("Worldview"), announces it is exercising its right under I… http://t.co/t52jOpdcey

— Worldview Capital (@WorldviewCap) September 7, 2015

Speaking after yesterday’s EGMs, Petroceltic chief executive Brian O’Cathain said it remains the company’s intention to raise further funds before the end of this year, in and around the value of the recently proposed bond issue, which was shelved due to market conditions, and that the board is looking at a number of funding avenues, including the taking on of additional bank debt.

He reiterated his company’s line from earlier in the day that Worldview stating it will not support any further financings by Petroceltic, until the Dublin firm’s board and senior management resigns, “clearly demonstrates its desire to gain control of the company without paying fair value, which is to the detriment of the majority of shareholders”.

Worldview, a Swiss-domiciled investment fund manager, holds a near 30% stake in Petroceltic.

Mr O’Cathain said that, as a shareholder, Worldview has every right to call for shareholder votes.

However, he questioned how long Worldview’s backers will tolerate its policy of upheaval.

Prior to a rally last week, the ongoing feud was seen as being part of the fuel driving Petroceltic’s share price down by over 30% in recent months.

“Petroceltic believes that today’s announcement [the calling for another EGM in October] should be seen in the context of all other actions by Worldview in 2015, including the requisitioning of three EGMs, various public announcements critical of the company’s personnel, strategy, performance and operations and the initiation of court proceedings in Ireland,” the Irish company said in its statement yesterday.

The company also refuted fresh online allegations over tax allegations emanating from its Bulgarian operations.

Management said it has no knowledge of any investigation from Bulgaria’s tax authorities and noted it has recently completed a routine tax audit there, “in full co-operation with the Bulgarian authorities”.

“Petroceltic will take all steps necessary to protect its good name and that of its staff and contractors and will vigorously pursue any party making or repeating incorrect or defamatory allegations,” it stated.