High Court approves Petroceltic survival scheme

An amended survival scheme for Petroceltic International and two related companies which sees the troubled explorer taken over by Cayman-Islands-based fund Worldview has been approved by the High Court.

High Court approves Petroceltic survival scheme

The scheme came into effect at 6pm yesterday.

There was no opposition to the modified scheme when it was put before Mr Justice Brian McGovern from 12.30pm yesterday.

Secured lenders, employees — who will do better under the modified scheme — and other creditors either supported the scheme or adopted a neutral position.

All of the company’s senior staff, about 30 people, had voted against the origianl scheme at creditors’ meetings and later hired lawyers to advance their objections to the scheme.

After negotiations between the sides this week, modifications were agreed which will see the employees getting 20% of entitlements which had been estimated at some €3.6m under “change of control” clauses in their employment contracts, rather than the 5% originally proposed.

They have also been assured the notice provisions of their contracts will be honoured. On that basis, their counsel John O’Donnell said they were not objecting to the modified scheme.

The court was told another modification to the scheme is that Dana Petroluem, following an agreement, will no longer be treated as a creditor of the company and will instead stand outside the scheme.

Seeking approval for the scheme, Michael Collins, for examiner Michael McAteer, said it had also been agreed there will be a change in management of the company and the investor’s nominees will be appointed to the board.

Two new directors, including Worldview’s Angelo Moskov, along with an alternate director, will be appointed, he said.

There will also be a new company secretary.

Counsel outlined the scheme provides that the investor will provide up to $100m working capital to Petroceltic over the next three years and will also subscribe for 150m new ordinary shares.

Creditors will get 5% of sums owed and creditors who claimed benefits under change of control clauses would get 20%.

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