Petroleum Africa
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Thursday, February 9, 2017
Release
Following its requisition of a General Meeting (GM), issued on 24th January, Crown Ocean Capital (COC) the Monaco-based private investment vehicle, has continued to purchase Bowleven stock.
In view of this, and ahead of the more detailed response within the circular convening the GM, Bowleven wishes to advise all shareholders of its view of key aspects of the COC proposals and why the Board will unanimously be recommending shareholders vote against all resolutions. In the meantime, shareholders are urged to support their Board and take no immediate action with regard to their holdings:
o Stripping the cash from Bowleven’s balance sheet, and
o Leaving it in a precarious position potentially unable to fund the investment necessary to realise any or all value from its Cameroon assets; this substantially weakens its’ bargaining position
o This is exceptionally poor governance, delivering stewardship of the company into the hands of unvetted COC appointees and removing all governance safeguards for other shareholders;
o The Board will lose vital relationships with the Cameroon Government key to progressing the assets and realising value, and lose its entire relevant oil & gas experience and industry relationships
o Their first approach, in August 2016, was to advocate an MBO, but desisted when the management made it clear that the offer price must be at a level the Board could recommend
o Their second approach was to support the existing management team, Chairman and strategy, and to impose new non-executive directors, but the legal procedures were defective
o Their third approach is to dismiss all Board members, except the Chief Operating Officer, who previously they sought to dismiss
The company’s strategy provides you with the best route to maximising the value of your shares:
o We must retain sufficient financial flexibility in order to realise maximum value from Etinde
o After significant investment, time, and effort, Bomono is on the cusp of delivering value through development and farm-out. COC proposes to cease the very modest outlay needed to bring this to fruition
Chairman, Billy Allan 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
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