Petroceltic denies corporate goverance failings

Dublin-based oil and gas exploration group Petroceltic has denied allegations of corporate governance failings over its recent $100 million share placing.

The allegations have been made by the company's single biggest shareholder Worldview Capital management, which holds a 17 per cent stake in Petroceltic. The investment management group has urged fellow shareholders to reject a resolution to be held at the exploration company's egm on June 9th that would lead to the completion of the placing.

Petroceltic, which on Friday announced that some of its latest drilling work in Kurdistan, Romania and Egypt had failed to produce significant volumes of oil or gas, said it considers the passing of the second tranche resolution to be in the best interests of the company and its shareholders. It added that the placing was a preferable alternative to that proposed by Worldview.

The company said the placing had allowed them to bring in a strategic investor and to diversify its shareholder base.

“Petroceltic has always and will continue to uphold the interests of all its shareholders and the board believes that these interests are best served by, inter alia, ensuring a diverse and balanced shareholder base, bringing new and valuable experience into the company and maintaining high corporate governance standards,” it said.

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 prior to the placing to subscribe for up to $100 million of new ordinary shares at 162 pence per share. The offer was rejected by Petroceltic’s board. In a statement the company said on Friday that Worldview’s proposals “was not fully termed and therefore lacked certainty.”

The company denied allegations of corporate governance failings and said the placing structure it had proposed was one that “is commonly used by public companies and widely accepted as providing a secure and swift method of raising funds.”