TIDMPCI
RNS Number : 9569Q
Petroceltic International PLC
03 March 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION.
Dublin
3 March 2016
Petroceltic International Plc
Response to Worldview Offer
The Board of Petroceltic International plc ("Petroceltic" or the
"Company") has considered the announcement made on 26 February 2016
by Sunny Hill Limited ("Sunny Hill"), a company wholly owned by the
Worldview Economic Recovery Fund, of its firm intention to make an
all cash offer for the entire issued and to be issued share capital
of Petroceltic other than the Petroceltic Shares in the beneficial
control of Worldview International Management Limited SEZC and/or
any of the Worldview Funds (together, "Worldview") at a price of 3
pence in cash for each Petroceltic Share (the "Offer").
Strategic Review Update
As announced on 23 December 2015, Petroceltic has initiated a
formal strategic review of the Company's business and assets with a
view to considering all options to maximise value for shareholders
and stakeholders (the "Strategic Review"). As part of the Strategic
Review, the Board, together with its advisers, have engaged with
interested parties on a number of potential transactions including,
inter alia, a farm-out or sale of one or more of the Company's
existing assets, a corporate transaction such as a merger with a
third party or the sale of the entire issued, and to be issued,
share capital of the Company and the raising of capital in the form
of debt and/or a subscription for new ordinary shares in the
Company by one or more third parties.
While the Board continues to progress discussions with a number
of parties, on both asset sales and potential corporate
transactions, there is no certainty that the Strategic Review
process will result in any other offer for the issued, and to be
issued, share capital of the Company, an agreement for the sale of
all or part of the Company's assets, or another form of corporate
transaction, or as to the terms of such offer or agreement, should
any be forthcoming.
The Company has continued to have a constructive dialogue with
its lending group (together the "Lenders"), who have supported the
Strategic Review process through their provision of short term
financing and ongoing waivers from the requirement for the Company
to make repayments under its Senior Bank Facility. Most recently,
on 22 February 2016, the Company announced it had received a
further waiver of repayments under its Senior Bank Facility until 4
March 2016.
The Lenders have indicated their willingness to consider further
waivers as may be required to continue the Strategic Review process
based on circumstances applying at the time of any application.
However, there is no certainty that the Lenders will grant any such
further waivers. Should the Company be unable to secure further
waivers from its Lenders, it may lead to the withdrawal of the
financial support of the Lenders and the requirement for the
Company to make full repayment of its Senior Bank Facility, which
the Company is not currently in a position to satisfy. Amounts
currently outstanding under the Senior Bank Facility stand at
approximately US$230 million and the Group has cash balances of
US$33.4 million of which US$26.4 million is held in local
currencies and not readily convertible.
The Lenders have also provided conditional financial support to
the Company in the form of a limited advance of new funds and
through allowing the Company to retain a portion of the proceeds
received from asset disposals completed since the commencement of
the Strategic Review. However, there is no certainty that the
Company will be able to secure further funding from its Lenders or
from other potential providers of capital. Should the Company be
unable to secure further funding on acceptable terms, it may be
unable to continue the Strategic Review process and conclude any of
the initiatives currently being undertaken as part of it, including
the Offer. In such circumstances, there could be no certainty that
Petroceltic Shareholders would realise any value from their holding
of Petroceltic Shares.
Worldview Offer
Under the terms of the Offer, Petroceltic Shareholders would be
entitled to receive 3 pence in cash for each Petroceltic Share (the
"Offer Price"). The Offer values the entire issued and to be issued
share capital of Petroceltic at approximately GBP6.42 million.
The Offer Price represents a discount of approximately:
-- 83.3% to the Closing Price of 18.0 pence per Petroceltic
Share on 25 February 2016, being the last trading day prior to the
date of the announcement of the Offer by Sunny Hill;
-- 73.9% to the Closing Price of 11.5 pence per Petroceltic
Share on 21 January 2016, being the last trading day prior to the
date of the announcement released by Worldview, via Worldview
Capital Management, regarding a possible offer for the Company;
and
-- 89.4% to the Closing Price of 28.375 pence per Petroceltic
Share on 22 December 2015, being the last trading day prior to the
announcement of the Strategic Review process.
The Offer will be conducted by way of a contractual takeover
offer and will be conditional, inter alia, upon the receipt by
Sunny Hill of valid acceptances in respect of not less than 90% of
the Petroceltic Shares not beneficially owned or controlled by
Worldview, which as at the date of the Offer announcement stood at
approximately 29.6% of the Company's issued share capital.
Board Recommendation
The Board of Petroceltic, which has been advised by Davy, has
considered the Offer and has consulted with a number of
stakeholders, including the Company's Lenders.
In evaluating any offer, the Board must consider the risks and
uncertainties relating to it. The Board notes that the Offer
provides no information on how the Company is to be funded during
the Offer period, to allow the completion of the Offer. The Offer
also provides no information on the proposed treatment of the
Company's Senior Bank Facility both during the Offer period and
upon any change of control of the Company, which, unless waived by
the Lenders or otherwise amended, would trigger an immediate
repayment obligation in respect of all amounts owing under the
Senior Bank Facility. Petroceltic Shareholders should be aware that
there is no certainty that the Company will continue to receive
waivers from its Lenders or that it will be able to secure funding
on acceptable terms to enable it to complete the Strategic Review
and/or the Offer or achieve an outcome for Petroceltic Shareholders
that is superior to the Offer.
The Board believes that the overall funding position of the
Company is a critical determinant of the value, if any, that may be
realised through the Strategic Review and, given the Group's
current circumstances, there can be no certainty that Petroceltic
Shareholders will realise any value from their holding of
Petroceltic Shares. The Board believes that the Offer undervalues
the Company on the assumption of its having appropriate long term
funding in place.
The Board therefore believes that the terms and conditions of
the Offer, combined with the current financial circumstances of the
Group, create significant uncertainty regarding the ability for the
Offer to be completed in accordance with its terms.
Based on these factors the Board has concluded that it is not
possible to give a firm recommendation to all Petroceltic
Shareholders at this time to either accept or reject the Offer once
made.
Petroceltic Shareholders are therefore recommended to take no
action at this time in relation to the Offer.
The Company will continue to update Petroceltic Shareholders on
the progress of the Strategic Review process and the status of the
Company's banking waivers in due course.
ENDS
For further information, please contact:
Petroceltic International plc:
Tel: +353 (1) 421 8300
Brian O'Cathain
Tom Hickey
Davy Corporate Finance:
Financial Adviser, Nominated Adviser and Joint Corporate Broker
to Petroceltic
Tel: +353 (1) 679 7788
John Frain
Roland French
HSBC:
Joint Corporate Broker to Petroceltic
Tel: +44 (0) 207 991 1506
Stuart Dickson
Peter Glover
Bell Pottinger:
Joint PR Adviser to Petroceltic
Tel: +44 (20)3772 2500
James Henderson
Rollo Crichton-Stuart
Murray Consultants:
Joint PR Adviser to Petroceltic
Tel: +353 (1) 498 0300
Joe Heron
Douglas Keatinge
Definitions:
"Closing Price" in respect of any trading
day, the closing middle-market
quotation of a Petroceltic
Share as derived from the
AIM appendix to the Daily
Official List;
"Daily Official List" The Daily Official List published
by the London Stock Exchange;
"Petroceltic Shareholders" the holders of Petroceltic
Shares;
"Petroceltic Shares" the ordinary shares of EUR0.3125
each in the capital of Petroceltic;
and
"Senior Bank Facility" the senior secured facility
provided by the Lenders to
Petroceltic in April 2013.
The Directors of Petroceltic International plc accept
responsibility for the information contained in this announcement.
To the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case), the information
contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such
information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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