Shareholders Seek to Oust Two Exco Directors

Three of Exco Resources Inc.'s largest shareholders are seeking to oust two directors serving on a committee that is weighing bankruptcy and other strategic options for the struggling oil-and-gas producer, according to people familiar with the matter.

WL Ross & Co., Canadian insurance magnate Prem Watsa and Bluescape Resources Co. have voted to withhold their support for Jeffrey Benjamin and Jeffrey Serota, two of the three members on the recently formed special committee, the people said.

The committee is assessing the Exco's financial situation and exploring strategic alternatives including swapping debt for equity, selling assets and restructuring, either in or out of court.

The persistent slump in natural gas prices has weighed on Exco, whose stock price has fallen 65% over the past year and recently traded at 56 cents. WL Ross is the company's largest shareholder, with an 18% stake as of March 31, according to FactSet. A fund controlled by Mr. Watsa held 9% as of March 31, while Bluescape owned 6.2% as of Dec. 31.

The shareholders' move threatens to complicate the committee's efforts. Exco's board rules compel directors to offer their resignation if they receive more "withhold" votes than votes in their favor, according to regulatory filings. Exco's annual meeting, at which directors are up for re-election, was slated to begin Thursday.

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(END) Dow Jones Newswires

May 19, 2016 12:05 ET (16:05 GMT)

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