Reabold Resources management continues to fend off another ouster attempt by dissatisfied shareholders, as the increasingly bitter dispute approaches a key vote in January.
It comes as Reabold (AIM:RBD) faces a shareholder vote over proposals to remove its management and directors.
A group led by Kamran Sattar of Portillion Capital launched its latest takeover bid in early November, claiming his cohort had “lost all confidence” in the company’s board.
The group of 13 shareholders, which hold around 7.84% of the company’s share capital, called for the removal of the company’s co-CEOs and directors, and the appointment of Mr Sattar as chairman and Andrea Cattaneo – founder of Africa-focused Zenith Energy Ltd – as chief executive.
It follows a number of previous attempts by Mr Sattar to wrest control of the company.
In a recorded interview with Proactive Investors published on 21 December, Reabold’s incumbent co-CEOs Stephen Williams and Sachin Oza again advised shareholders to vote against all proposals, reiterating warnings over the “opportunistic” takeover bid.
Mr Williams reaffirmed his belief that the timing of the ouster attempt is “not coincidental”, given it follows payment of the second tranche of funds from Shell after the company’s sale of Corallian Energy last year, and ahead of a third tranche of funds expected early in 2024.
All told, Reabold is set to receive around £12.7m from the sale, while the supermajor looks to progress the Victory gas project held by Corallian.
Beyond the requisition acting as a distraction for management, Mr Oza alleged that the conflicts of interest posed by Portillion and Mr Cattaneo are “very real, very significant” – and in the case of the proposed CEO “verging on egregious”.
He pointed to Zenith’s status as a competitor and its historic interested in Reabold California, amid similar concerns over Portillion’s ownership in US-based Daybreak Oil and Gas.
A proxy paper report prepared by Glass Lewis and shared by the company on December 29 also recommended that shareholders vote against the resolutions.
‘Certain disaster’ without change
In a letter written in response to the interview, Mr Sattar and Mr Cattaneo condemned what they described as “false statements devoid of factual basis” and “gratuitous ad hominem attacks” as articulated by Reabold.
They insist they are seeking a change of leadership at the firm “to avert the certain disaster that awaits the company if the current ‘strategy’ of misguided investments is allowed to continue.”
In particular the requisitioners maintain that the company’s Colle Santo asset is a waste of time and resources and criticised the lack of material progress at the site. They also contend that the geological risks posed to a nearby dam and local hostility to oil and gas activities mean that the asset “will likely never produce”.
“Cast in the best possible light, it reveals that the board have fundamentally no idea what they are doing in the context of the Italian oil and gas space,” the letter states.
In their interview, Reabold management maintained that first production at Colle Santo will be online “very soon.”
Mr Sattar added that any new leadership would place “all the company’s focus and resources” on drilling at its onshore West Newton site in the UK, whilst seeking to “salvage” the rest of the portfolio and “drastically reducing costs.”
The group has also published a business plan for the firm via its website.
Undaunted, the letter concludes that should the January 10 vote prove unsuccessful, the group will be “unrelenting” in its efforts – and a third requisition will be called.
Due diligence and delisting risk
Meanwhile in a December 28 market announcement, Reabold noted that its nominated adviser Strand Hanson is continuing to carry out independent due diligence on the proposed new directors as sought by Mr Sattar’s group.
However, it notes that if the requisition’s resolutions are passed before the completion of this process, Strand Hanson expects it would be required to resign from its role with immediate effect.
Were this to occur, Reabold’s ordinary shares on the AIM exchange would be suspended following the closing of the meeting on 10 January.
“If a replacement nominated adviser is not appointed within one month, admission of the company’s securities to trading on AIM will be cancelled,” it added.
Mr Sattar and Mr Cattaneo said the update was “meaningless”, adding that a replacement adviser had already been identified and that they expect to clear any due diligence procedure “without difficulty”.