Cadogan Petroleum Plc - General Meeting
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Press Release 21 October, 2019
This announcement contains inside information as defined under the Market Abuse Regulations n. 596/2014
(“Cadogan” or the “Company”)
Mailing of notice of general meeting
Further to the announcements made on and , (“Cadogan”), an independent, diversified oil & gas company listed on the Main Market of the , hereby confirms that it has today mailed to the Company’s shareholders a notice of general meeting with respect to the matters that were the subject of the notice of requisition provided to the Company in accordance with Section 303 of the Companies Act 2006.
The notice of general meeting is accompanied by the members’ statement of the requisitioning shareholders and also the Company’s response in relation thereto. These documents, together with the relevant proxy form are also available for download from the Investor Centre section on the Company’s website .www.cadoganpetroleum.com
The general meeting will be held on Friday at at the offices of . 6 Floor, , EC3V 0HR.
(which term excludes only for the purposes of this RNS and the Company’s response to the members’ statement made by the shareholders who sent the requisition notice, one of whom was himself) fundamentally and unanimously disagree with the substantive points made by the requisitioning shareholders in the members’ statement which has been published (in full and unedited) by the Company and which accompanies this notice of general meeting. The Board unanimously recommends that shareholders vote against all of the proposed resolutions.
The requisitioning shareholders allege that the Company has continuously underperformed, however since 2011 the Company has actually successfully undertaken a comprehensive operational and financial turn-around. The Company has now returned to profit.
The requisitioning shareholders have highlighted the fact that the Company’s share price has not materially improved in recent times. While this is not disputed, the Board is of the view that the underlying reasons why the Company’s share price has not improved in line with the Company’s recent positive performance are not the result of the wrong decisions having been taken by the Board. The Board’s strategy for the Company in recent years has been to focus on the longer-term fundamentals, taking a prudent approach which is based on production and which is both sustainable and does not put assets at risk unduly.
Furthermore, the Board disputes the assertion by the requisitioning shareholders that the Company’s share price has underperformed its peers or the key sector indices (which are considered to be the AIM E&P index).
The Board remains of the view that the extension of the Proger convertible loan was in the best interests of the Company. It was unanimously approved by all Directors, including . If the loan is, with the approval of Cadogan's shareholders, converted, it represents an opportunity to share in the attractive growth of an enterprise which is well managed and active in sectors beyond just the oil & gas industry, which has the benefit of diversifying the Company’s risk profile. The fair market value of the stake in Proger into which the loan would convert had appreciated by approximately in the period from to (see Note 12 to the Company’s Condensed Financial Statements for the six months ended ). Alternatively, if the loan is not converted, it will attract interest at a good rate (being 450 bps higher than that which is paid by Italian government bonds of comparable maturity).
The Board is also optimistic that Cadogan will benefit from synergies and other opportunities for cooperation with Proger in and outside of , particularly if the loan is converted.
The Board questions the motives and timing of the requisitioning shareholders' actions. The requisitioning shareholders voted at the Company's AGM in June in favour of the re-election of Messrs Testa and Schenato, whom they are now seeking to remove.
While the Company recognises that periodical change at the Board level is an essential element of good governance, it is difficult for the Board to view the requisitioning of the general meeting and proposal by these shareholders to remove two directors and appoint three others as anything other than an attempt to take control of the Company (including the process of appointing a new CEO) without going to the expense of making a general offer that would enable the rest of the shareholders of the Company to tender their shares at a fair price (i.e. a premium to the current market price).
Despite seeking control of the Board, the requisitioning shareholders have not provided any information to either the Board, or to the rest of the shareholders with respect to the strategy that they would implement for the Company, were they to secure that control.
Messrs Testa and Schenato have served the Company well. They have relevant experience in the industry, whereas the proposed new appointees to the Board have no experience in oil & gas operations.
This Announcement has been issued by, and is the sole responsibility of, the Company.
For further information, please contact:
Guido Michelotti Chief Executive Officer +380 (44) 594 5870 Ben Harber Company Secretary +44 0207 264 4366 Cantor Fitzgerald Europe Broker to David Porter +44 (0) 20 7894 7000
Cadogan Petroleum plc Cadogan Petroleum plc
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