Petroceltic (LON:PCI) has told shareholders to vote against proposals put forward by a major shareholder to remove chief executive Brian O’Cathain.
The proposals of Worldview Capital, which owns 25.7%, are a means for the rebel shareholder to take control of the company without paying other shareholders a fair price, Petroceltic said in a statement.
It also said the removal of O’Cathain could materially prejudice the Petroceltic business, given his deep knowledge of the group's operations and his long-standing relationships with a range of important stakeholders.
The Isarene PSC in Algeria, the group’s key asset, could also be put at risk under the country’s laws if Worldview took effective control of company, Petroceltic added.
Worldview seeks the removal of O’Cathain as well as the appointment of its own CEO Angelo Moskov and Maurice Dijols to the Petroceltic board.
Petroceltic says Worldview is already adequately represented on the board. The shareholder already has two representatives on the Petroceltic board, as Joe Mach and Don Wolcott were appointed following an agreement in July.
Approval of the measures put forward by Worldview would have a negative impact, the company said, as it would increase Worldview’s representation on the board and reduce the proportion of independent directors.
Instead, Petroceltic has undertaken a recruitment process, via an independent executive search firm, and it subsequently proposes to appoint Nicholas Gay and Neeve Billis as independent directors.
“Worldview has suggested that it believes that changes are required to the company's strategy, but it has failed to give any specific details of such changes or to explain to shareholders its future plans for the company if the Worldview Resolutions were to be approved at the EGM,” Petroceltic said.
“The board is fully supportive of the Company's current strategy.”
An extraordinary general meeting will take place on February 25 in Dublin.
The Petroceltic board recommends shareholders vote against the Worldview resolutions and vote in favour of the company’s proposal to appoint Gay and Billis.
Directors of Petroceltic, holding 19.4% of the company’s shares, intend to vote in line with the board’s recommendation.