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ShareProphets RNS Translation Service – Bowleven names the day

By Nigel Somerville | Wednesday 15 February 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

And so finally, this morning, AIM-listed Bowleven (BLVN) has named the day for the requisitioned sack-the-board EGM. The company first announced receipt of the EGM requisition from Crown Ocean on 24 Jan and three weeks on it has finally got around to calling it – for 14 March. Hurried this is not. The ShareProphets RNS Translation Service explains all…..(original in bold)

Notice of General Meeting and

 Posting of Circular to Shareholders

We got it all in the post on deadline day 

The Board's recommendation is to VOTE AGAINST all resolutions

Please don’t hand us a P45

Further to the announcements dated 24 January 2017 and 8 February 2017 in connection with the requisition of a general meeting of the Company by Crown Ocean Capital P1 Limited (Crown Ocean), Bowleven announces that the circular (the Circular) containing the notice of general meeting (the General Meeting) has been posted to Shareholders. The Circular is available on the Company's website at

We moved as quickly as we could to get the paperwork sorted – almost as quickly as we are delivering true shareholder value. 

Key sections from the Circular, including the letter from the Chairman and the detailed response to, and rebuttal of, the statement by Crown Ocean accompanying its notice of requisition are set out at the end of this announcement.

Of course, we’ve not included what Crown Ocean has to say in this RNS so you aren’t quite sure what we are rebutting (or what we are not). 

The Board's recommendation is that Shareholders VOTE AGAINST all resolutions

 Just in case you didn’t get that the first time, please don’t hand us a P45

The Board unanimously recommends that Shareholders VOTE AGAINST all of the resolutions to be proposed at the General Meeting (the Resolutions) for the following reasons:

.....or the second

·    Crown Ocean is not offering Shareholders a fair deal

Always a good way to start, throw a bit of mud. It is not that Crown is looking to trouser all the cash for itself, you understand, or that Crown is proposing that some shareholders are treated more equally than others. But it is clearly all very unfair. Surely you see that? It certainly is unfair on us as a P45 would mean the end of the gravy train for us and put a stop to all that shareholder value we have delivered.

·    Crown Ocean's plans substantially reduce the Company's options and ability to maximise value for Shareholders 

Given that until the EGM was requisitioned our shares were trading below cash and Crown plans to return the cash this is obviously a well-reasoned argument. Surely you see that too? And we’ve got oodles and oodles of jam-tomorrow (as we always have had) once we have very carefully and selectively splurged lots of money on drilling campaigns, remuneration and perhaps the odd acquisition. As you all know, our record on exploration work is remarkable whereas Crown just wants to return the cash and get the best value it can from the assets.

·    Crown Ocean's intent is to create a holding company, strip the cash and leave the Company unable to pursue value creation opportunities

That argument obviously works in the light of our most excellent record of value-creation in the last few years. It certainly has created value for us.

·    Crown Ocean is not presenting a credible strategy to realise long term value from Bowleven's assets

Obviously handing back the cash and realising the assets instead of allowing it all to wither away on failed drilling campaigns and excessive boardroom remuneration and administrative expenses is not a credible strategy. Surely you see that?

·    Crown Ocean intends to remove the existing board of directors, delivering stewardship of the Company into the hands of unvetted and inexperienced Crown Ocean appointees

As an AIM-listed company the Nomad will have to vet all appointees. But that doesn’t count, obviously. As for inexperienced, that’s a great line. And despite the fact that the proposed new board will be appointed by the company’s shareholders (assuming a win for the rebels), we’ll call them appointees of Crown.

·    the Resolutions would result in the nominees of a 15.56% minority shareholder controlling the Board, leaving it with no independent directors representing the interests of Shareholders as a whole and rendering the Company non-compliant with applicable corporate governance guidelines

We won’t mention here that Crown is saying that the proposed new directors are, in fact, strong, independent and of sound reputation and experience. Nor will we address Crown’s point that four of the current seven directors of the company are ex-Cairn executives of advisors, including two NEDs. That’s independence for you.

·    Crown Ocean's vote against the share buy-back programme has already damaged Shareholders by removing a tax-efficient way to return excess cash

So is handing out the cash by way of a return of capital, but only if the return of capital crystalises a loss. Oh, er…..

·    Crown Ocean's plans will remove valuable knowledge of the assets and well-established relationships and interfaces with key Cameroon decision makers

This is why Crown has been buying more shares in the company – it obviously wants to put its own cash in jeopardy.

·    Crown Ocean's proposals remove Shareholders' best chance to maximise value

That is why the share price has been going up steadily since the EGM was requisitioned. Shareholders are obviously extremely fearful of what Crown’s proposals will do to their investment. Crown’s proposals would also remove the current board’s best chance to realise value for itself from remuneration packages, but we’d best not mention that.

The Board, in making its recommendation to VOTE AGAINST the resolutions proposed by Crown Ocean, also asks Shareholders to consider the following:

….please don’t hand us a P45 

·    The Board is committed to maximising value from the Company's assets through the implementation of its corporate strategy

…which has been so successful to date

·    The Company is staffed with experienced oil and gas professionals focussed on creating value and delivering material upside to all Shareholders

…and not just Crown. We just wanted to sling a bit more mud there. Obviously all the other staff will all walk if we are sacked – that is a perfectly reasonable assertion.

·    The Company is in a position of strength and the Board is best placed to deliver for all Shareholders

….until we are sacked.

·    The Company already has a Board compliant with applicable corporate governance standards, providing Shareholders with effective and appropriate governance for their investment

….which we really want you to believe will not be the case if Crown gets its way. And you can really see the benefit in the way we have delivered shareholder value over the years. 

ShareProphets is happy to continue to support the rebels and will celebrate the removal of the fat cats currently in charge. We urge shareholders to get in touch with

Crown’s reasons for calling the EGM can be found HERE.

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