Petroceltic wins legal bid to block request for egm

Irish oil and gas exploration firm Petroceltic was yesterday granted an injunction preventing an extraordinary general meeting that had been called by its largest shareholder, Worldview, from going ahead.

Mr Justice Henry Abbott accepted undertakings on behalf of Worldview that shareholders would be informed of the court’s decision and of the fact there would not now be an egm. The judge said both parties should make every effort to have an early trial of the proceedings.

Petroceltic had claimed that the convening of the egm in London, on October 5, by Worldview International Ltd SEZC was unlawful and should not be allowed to proceed. Worldview, through a nominee company, holds 29% of Petroceltic’s share capital.

Worldview had sought to put two resolutions before the proposed egm to the effect that shareholders would not approve of either Petroceltic’s decision to issue senior secured bonds announced last June, or of Petroceltic incurring any new borrowings or issuing any new debt securities.

The injunction will remain in place pending the final outcome of the dispute between the parties. Granting of the injunction had been opposed by Worldview.

Worldview, which was represented by Michael Cush SC, who appeared with barrister Niall Buckley, claimed the egm should be allowed to proceed. It claimed the resolutions were advisory and were not binding in nature.

Mr Cush had told the court that, in an era of increased corporate democracy and shareholder activism, the case raised important points of law in relation to shareholder rights to bring advisory resolutions.

Petroceltic, represented by Paul Gallagher SC, appearing with barrister Andrew Fitzpatrick, claimed the egm was part of a campaign against the board of directors. Worldview had repeatedly and publicly attacked Petroceltic which was damaging to the company.

Mr Gallagher had told Judge Abbott that the proposed resolutions, which concerned Petroceltic’s power to borrow money, were invalid because they sought to interfere with the exclusive right of the directors to exercise the borrowing powers of the company.

Speaking directly after yesterday’s ruling, Petroceltic chairman, Robert Adair said: “We are pleased that the court has upheld Petroceltic’s application to prohibit Worldview’s attempt to convene a further egm and we now look forward to focusing on running the company to deliver value for all shareholders.”

“Petroceltic remains committed to responding to legitimate concerns raised by any shareholder and furthering the conversation with all of our shareholders in a constructive manner,” he added.

The company’s board also reiterated it view that shareholders should continue to take no action in relation to the Worldview-convened egm.