Bowleven Plc (LON:BLVN) told investors to reject the proposals made by activist shareholder Crown Ocean Capital (COC).
Monaco-based COC requisitioned an EGM last month and Bowleven notes that the investor has been buying more shares in the company - a separate regulatory statement shows it now owns 15.56%.
In January, COC proposed to sack the board, cut spending on admin, cease spending on the Bomono project and return excess cash holdings to shareholders. It claims that its plan creates an alignment of stakeholders in the Etinde project and identifies a route to value maximisation from Etinde over time.
COC intends to take control of the company without paying fair value, Bowleven says.
Monaco based COC’s plan is the worst case of corporate governance. New video from Bowleven Chairman Billy Allan. pic.twitter.com/dFu72lzMGc
— Bowleven PLC (@bowleven_plc) February 8, 2017
The London-listed oil and gas company also said that COC had “no credible strategy” to maximise value from key assets Etinde and Bomono.
It further claimed that COC wants to convert Bowleven into a holding company by stripping cash from the balance sheet and it said that Bowleven would be left in a precarious position, unable to fund investment needed to realise value from its assets.
Bowleven also stated that COC has shown “utter inconsistency” during its involvement with the company – starting as an advocate of a management buy-out (at too low a price for directors to recommend), then proposing to appoint new additional directors, and latterly the proposal to remove the Bowleven board.
Billy Allan, Bowleven chairman, said: “Ahead of our formal response, we wish to give timely advice to shareholders that COC's proposal has absolutely no merit.
“It is self-evidently, and solely, a means to turn Bowleven into a cash dispenser for themselves, by taking control of the board.
“By contrast the company is progressing exciting plans at Etinde and Bomono that have the potential to deliver material upside.
“We see a clear choice for shareholders between losing control of the company, or retaining substantial upside in an E&P company at a favourable point in the market cycle."