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Threat to Irish oil firm's share sale

Friday, May 30 16:51:48

Petroceltic International said an activist investor is threatening a planned a share sale to fund the Irish oil explorer's drilling.

Petroceltic planned to raise $100 million through the issuance of new shares at 157 pence, the second tranche of which needs to be approved at an extraordinary general meeting set for June 9. Worldview Capital Management SA, which holds almost 20 percent of the Dublin-based company, has criticised the way the fundraising has been carried out.

Petroceltic Chief Executive Officer Brian O'Cathain said today he plans to hold talks with the Switzerland-based investor next week to try and resolve the matter that also puts a move to London's main stock exchange at risk.

"If we don't get the placing, we'll have to look at other forms of funding," O'Cathain said in a phone interview. "We'll have to put on hold the step up to the main board."

Worldview's proposal to buy all the new shares at 162 pence, was rejected by Petroceltic in favor selling half the shares offered to Dovenby Capital Ltd.

Petroceltic requires a 75 percent vote in favor of the share sale. Worldview's holding and support from another 2.3 percent means it's close to reaching the point at which the placing is rejected.

Worldview declined to comment through a spokesman when contacted by Bloomberg.

Worldview's willingness to underwrite the entire $100 million placing would have resulted in it owning more than a quarter of the oil explorer and would have given it control of the company, Petroceltic said in a statement.

Petroceltic has said the share sale is in the best interests of stakeholders.

Worldview has also questioned the process whereby Dovenby will take a shareholding in Petroceltic and the proposed election to the board of Ahmad Fuad Bin Mohd Ali from Bumi Armada Bhd. without pre-emption rights.

Separately, Petroceltic said today it didn't find hydrocarbons at its wells in Kurdistan, Romania and Egypt.

"This morning's disappointing announcement is unlikely to assist management efforts in its bid to seek shareholder approval" at the EGM, Goodbody Stockbrokers said in a note.

The stock fell as much as 10 percent to 145.25 pence in London trading, the biggest drop since April 8, and were trading at 148.25 pence as of 12:25 p.m.