An investment management group which holds a 17 per cent stake in oil and gas exploration group Petroceltic, said the Dublin-based firm's recent $100 million (€72.9 million) share placing contained a number of corporate governance failings and should be rejected at a forthcoming egm.
Worldview Capital Management, which saw its own offer to acquire the placed shares rejected on the day prior to the placing, has urged fellow shareholders to vote against the removal of pre-emption rights at the agm to be held on June 9th. Worldview said the removal of the tatutory pre-emption rights is "wholly unjustified."
Petroceltic placed 37.9 million shares at a price of 157 pence (192 cents) on Friday, May 16th, with investment company Dovenby Capital subscribing for $50 million (€36.4 million) of the placed shares, giving it an 8.88 per cent stake in the group.
While the placing was at a premium to the previous day’s closing price, Worldview claims it made an offer the previous day to subscribe for up to $100 million of new ordinary shares at 162 pence per share, which was rejected.
Worldview said the board did not disclose to shareholders, or explain its reason for rejecting its offer to underwrite the placing at a higher price, which it said would have respected pre-emption rights.
“The placing represents an abuse of fundamental and statutory pre-emption rights to the detriment of existing shareholders by granting preferential investment terms and an unjustified level of influence to a single new shareholder, Dovenby,” it said.
Around 23 per cent of the new ordinary shares from the placing have already been issued but the second tranche resolution is to be voted on at the egm. Worldview said it believes Petroceltic’s placing contains a number of corporate governance failings that mean the resolution should not be passed.
“We believe insufficient due diligence results have been presented to existing shareholders on the new investor and the haste with which the placing was conducted has not been adequately explained,” it said in a statement.
“Insufficient information has been provided to shareholders about the new investor, its principals, the strategic value and benefits that it brings to the company and why collectively this warrants shareholder dilution. Shareholders deserve to know more,”
“The manner in which the board has conducted the placing has effectively turned corporate governance on its head, allowing the board to choose its preferred shareholders rather than shareholders choosing their board,” it added.
In a brief statement, Petroceltic said it considers the passing of the egm resolution and the completion of the placing to be in the interest of the company and its shareholders. It said the placing had allowed them to bring in a strategic investor and to diversify its shareholder base.
It added that it would continue to engage with Worldview on the matters raised.
