Irish explorer PetroNeft Resources has struck a deal that ensures an activist shareholder cannot vote against the board at any general meeting for two years.
PetroNeft — which operates two licences in Siberia — has been at loggerheads with investment firm Natlata Partners, its largest shareholder with a near 29% stake, for a number of months.
Natlata, which invests in distressed or early stage projects in the Russian area, had wanted to overhaul the PetroNeft board, replace certain senior executives and gain more control of the company.
Yesterday, the two parties reached a settlement that sees Natlata gain three seats on the board and remove three PetroNeft representatives in the process.
For PetroNeft’s part, its senior management team remains intact and it has avoided Natlata gaining its preferred five seats on its board, while it has also reached agreement to have Natlata on side with board votes for two years.
The issue of it retaining its senior management is crucial.
The recent deal whereby joint-venture partner Oil India will cover 100% of the necessary funding to develop the flagship Licence 61 asset was conditional on the Irish firm’s current management team remaining in place.
Speaking yesterday, PetroNeft’s chairman David Golder said the agreement with Natlata is “the best way orward for all shareholders”.
“The agreement allows the company to implement our recently announced Licence 61 work programme with our partner Oil India along with a new emphasis on business development.
"This will allow the company to take advantage of opportunities in today’s market,” he added.
Natlata said it agreed terms “in the best interests of all shareholders”.
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