Petroceltic International PLC Response to Worldview Offer (9569Q)

TIDMPCI

RNS Number : 9569Q

Petroceltic International PLC

03 March 2016

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

Dublin

3 March 2016

Petroceltic International Plc

Response to Worldview Offer

The Board of Petroceltic International plc ("Petroceltic" or the "Company") has considered the announcement made on 26 February 2016 by Sunny Hill Limited ("Sunny Hill"), a company wholly owned by the Worldview Economic Recovery Fund, of its firm intention to make an all cash offer for the entire issued and to be issued share capital of Petroceltic other than the Petroceltic Shares in the beneficial control of Worldview International Management Limited SEZC and/or any of the Worldview Funds (together, "Worldview") at a price of 3 pence in cash for each Petroceltic Share (the "Offer").

Strategic Review Update

As announced on 23 December 2015, Petroceltic has initiated a formal strategic review of the Company's business and assets with a view to considering all options to maximise value for shareholders and stakeholders (the "Strategic Review"). As part of the Strategic Review, the Board, together with its advisers, have engaged with interested parties on a number of potential transactions including, inter alia, a farm-out or sale of one or more of the Company's existing assets, a corporate transaction such as a merger with a third party or the sale of the entire issued, and to be issued, share capital of the Company and the raising of capital in the form of debt and/or a subscription for new ordinary shares in the Company by one or more third parties.

While the Board continues to progress discussions with a number of parties, on both asset sales and potential corporate transactions, there is no certainty that the Strategic Review process will result in any other offer for the issued, and to be issued, share capital of the Company, an agreement for the sale of all or part of the Company's assets, or another form of corporate transaction, or as to the terms of such offer or agreement, should any be forthcoming.

The Company has continued to have a constructive dialogue with its lending group (together the "Lenders"), who have supported the Strategic Review process through their provision of short term financing and ongoing waivers from the requirement for the Company to make repayments under its Senior Bank Facility. Most recently, on 22 February 2016, the Company announced it had received a further waiver of repayments under its Senior Bank Facility until 4 March 2016.

The Lenders have indicated their willingness to consider further waivers as may be required to continue the Strategic Review process based on circumstances applying at the time of any application. However, there is no certainty that the Lenders will grant any such further waivers. Should the Company be unable to secure further waivers from its Lenders, it may lead to the withdrawal of the financial support of the Lenders and the requirement for the Company to make full repayment of its Senior Bank Facility, which the Company is not currently in a position to satisfy. Amounts currently outstanding under the Senior Bank Facility stand at approximately US$230 million and the Group has cash balances of US$33.4 million of which US$26.4 million is held in local currencies and not readily convertible.

The Lenders have also provided conditional financial support to the Company in the form of a limited advance of new funds and through allowing the Company to retain a portion of the proceeds received from asset disposals completed since the commencement of the Strategic Review. However, there is no certainty that the Company will be able to secure further funding from its Lenders or from other potential providers of capital. Should the Company be unable to secure further funding on acceptable terms, it may be unable to continue the Strategic Review process and conclude any of the initiatives currently being undertaken as part of it, including the Offer. In such circumstances, there could be no certainty that Petroceltic Shareholders would realise any value from their holding of Petroceltic Shares.

Worldview Offer

Under the terms of the Offer, Petroceltic Shareholders would be entitled to receive 3 pence in cash for each Petroceltic Share (the "Offer Price"). The Offer values the entire issued and to be issued share capital of Petroceltic at approximately GBP6.42 million.

The Offer Price represents a discount of approximately:

-- 83.3% to the Closing Price of 18.0 pence per Petroceltic Share on 25 February 2016, being the last trading day prior to the date of the announcement of the Offer by Sunny Hill;

-- 73.9% to the Closing Price of 11.5 pence per Petroceltic Share on 21 January 2016, being the last trading day prior to the date of the announcement released by Worldview, via Worldview Capital Management, regarding a possible offer for the Company; and

-- 89.4% to the Closing Price of 28.375 pence per Petroceltic Share on 22 December 2015, being the last trading day prior to the announcement of the Strategic Review process.

The Offer will be conducted by way of a contractual takeover offer and will be conditional, inter alia, upon the receipt by Sunny Hill of valid acceptances in respect of not less than 90% of the Petroceltic Shares not beneficially owned or controlled by Worldview, which as at the date of the Offer announcement stood at approximately 29.6% of the Company's issued share capital.

Board Recommendation

The Board of Petroceltic, which has been advised by Davy, has considered the Offer and has consulted with a number of stakeholders, including the Company's Lenders.

In evaluating any offer, the Board must consider the risks and uncertainties relating to it. The Board notes that the Offer provides no information on how the Company is to be funded during the Offer period, to allow the completion of the Offer. The Offer also provides no information on the proposed treatment of the Company's Senior Bank Facility both during the Offer period and upon any change of control of the Company, which, unless waived by the Lenders or otherwise amended, would trigger an immediate repayment obligation in respect of all amounts owing under the Senior Bank Facility. Petroceltic Shareholders should be aware that there is no certainty that the Company will continue to receive waivers from its Lenders or that it will be able to secure funding on acceptable terms to enable it to complete the Strategic Review and/or the Offer or achieve an outcome for Petroceltic Shareholders that is superior to the Offer.

The Board believes that the overall funding position of the Company is a critical determinant of the value, if any, that may be realised through the Strategic Review and, given the Group's current circumstances, there can be no certainty that Petroceltic Shareholders will realise any value from their holding of Petroceltic Shares. The Board believes that the Offer undervalues the Company on the assumption of its having appropriate long term funding in place.

The Board therefore believes that the terms and conditions of the Offer, combined with the current financial circumstances of the Group, create significant uncertainty regarding the ability for the Offer to be completed in accordance with its terms.

Based on these factors the Board has concluded that it is not possible to give a firm recommendation to all Petroceltic Shareholders at this time to either accept or reject the Offer once made.

Petroceltic Shareholders are therefore recommended to take no action at this time in relation to the Offer.

The Company will continue to update Petroceltic Shareholders on the progress of the Strategic Review process and the status of the Company's banking waivers in due course.

ENDS

For further information, please contact:

Petroceltic International plc:

Tel: [phone]

Brian O'Cathain

Tom Hickey

Davy Corporate Finance:

Financial Adviser, Nominated Adviser and Joint Corporate Broker to Petroceltic

Tel: [phone]

John Frain

Roland French

HSBC:

Joint Corporate Broker to Petroceltic

Tel: [phone]

Stuart Dickson

Peter Glover

Bell Pottinger:

Joint PR Adviser to Petroceltic

Tel: [phone]

James Henderson

Rollo Crichton-Stuart

Murray Consultants:

Joint PR Adviser to Petroceltic

Tel: [phone]

Joe Heron

Douglas Keatinge

Definitions:

 
 "Closing Price"              in respect of any trading 
                               day, the closing middle-market 
                               quotation of a Petroceltic 
                               Share as derived from the 
                               AIM appendix to the Daily 
                               Official List; 
 "Daily Official List"        The Daily Official List published 
                               by the London Stock Exchange; 
 
 "Petroceltic Shareholders"   the holders of Petroceltic 
                               Shares; 
 "Petroceltic Shares"         the ordinary shares of EUR0.3125 
                               each in the capital of Petroceltic; 
                               and 
 "Senior Bank Facility"       the senior secured facility 
                               provided by the Lenders to 
                               Petroceltic in April 2013. 
 

The Directors of Petroceltic International plc accept responsibility for the information contained in this announcement. To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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March 03, 2016 06:30 ET (11:30 GMT)