The 35% drop in Petroceltic International’s (PCI) share price over the last three weeks has been one of the most predictable events of the year. Once the company’s major shareholder, Worldview, fired the first shots in the latest civil war to engulf the company, there really was only one direction the stock could take. Against the backdrop of a persistently low oil price, lingering concerns about the health of Petroceltic’s balance sheet were bound to have a depressing effect. This morning the company issued its latest response to this unfolding disaster. And it doesn’t exactly inspire one with much confidence, even at 58p per share.
First up, news Friday that Rurelec (RUR) has finally sold its Canchayllo hydro-electric plant in Peru for net proceeds of $6.4m. This announcement comes after the previously announced sale for $6.5m back in March, an update in April that the $6.6m cash had not arrived but was expected “shortly” and an update in May that a loan which had been expected to have been settled out of that cash had been extended, before the Annual Report and Accounts for FY14 revealed deep in the notes that the sale had failed.
Boy, oh boy - an after-hours RNS from Rurelec. Last time we had one the Red Flag count hit twelve (see HERE). But it got worse when Rurelec dished up five RNSs in a single day (see HERE) which included FY14 results, but buried deep in the notes to the accounts it emerged that a previously announced sale of assets intended to fund the repayment on loans had, in fact, not taken place. Yesterday, on the dot of the end of the day’s trading, the company released a stunning AGM result.
As the market works itself up into a lather about the prospect of a bid for Gulf Keystone Petroleum (GKP), the significance of Wednesday’s events appear to have been missed by most shareholders. The headline news was Todd Kozel’s retirement as CEO of the company and his plan to remain as an executive director. The assumption appears to be Mr Kozel will see his wish granted in the vote held on his reappointment, at the AGM on July 17th. I’m not so sure. The departure of three of the four non-executive directors, whom M&G Investment Mgt managed to get appointed to Gulf’s board immediately before the last AGM, surely signals an escalation in the boardroom conflict that has plagued Gulf for too long. And now M&G is no longer playing nice...