Confident it will prevail, North Sea oil investor Reabold Resources (LON: RBD) will proceed with a meeting called by minority shareholder Pershing, which seeks to oust the company’s board.
Pershing Nominees, which owns about 6.93% of London-listed Reabold’s issued share capital, wrote to shareholders earlier this week calling for a requisition meeting in a bid to pass 11 resolutions that would see the company’s entire board of directors removed.
Pershing’s note also calls for the appointments to be replaced with four new directors of their own choosing.
For its part, Reabold accused Pershing of trying to “opportunistically gain” control of the company, its cash and assets without paying a “control premium”.
In an update Thursday morning, the company said the proposal letter “contained several deficiencies”.
Notably, it claimed one of Pershing’s resolutions could produce an outcome whereby the company could be left without a minimum of two directors to form a valid quorum, in breach of the Companies Act. However, it said Pershing has “refused to amend” the issues.
Despite this, Reabold’s board says it intends to proceed with the meeting on the basis that the process is “a major distraction and needs to be dealt with swiftly”.
It also believes that the potential to breach the Companies Act is considered “remote”, due to the indications of support it has received from other major shareholders.
Reabold reiterated its belief that Pershing has “a questionable motive” to gain control of the company and again drew attention to the fact that its proposed replacements include individuals with “a track record of value destruction…or no public board experience at all.”
A meeting date will be published alongside a circular to shareholders shortly.
In the meantime, the company advised its shareholders to take no action at this stage.
Reabold, which operates tranche of onshore and offshore assets in the UK, US and Romania, recently completed a £32 million deal with oil giant Shell for the former’s controlling stake in West of Shetland operator Corallian Energy.
The move netted Reabold £12.7m, aiding to its “financial felxibility”.
As part of the deal, Reabold acquired all of Corallian’s working interests in its portfolio, apart from the Victory licence, estimated to hold mid-case recoverable resources of 179 billion cubic feet of gas (bcf).
It intends to use the net proceeds from the sale to advance the development of its existing assets, including onshore hydrocarbon discover West Newton, and assess potential further acquisition opportunities.
Recommended for you
