Home Commodities Capricorn Energy executives walked out en masse in victory for activists

Capricorn Energy executives walked out en masse in victory for activists

by SuperiorInvest

The long-serving chief executive and chairman of Capricorn Energy is among seven directors to quit the Scottish oil and gas group’s board as they admit defeat after a battle with an activist investor Palliser Capital.

Five directors, including Capricorn chairman Nicoletta Giadrossi and Simon Thomson, who has been chief executive for more than a decade, will step down from the board with immediate effect. Two other directors, including chief financial officer James Smith, intend to leave before February 1.

After the eviction, only two current board members, Catherine Krajicek and Erik Daugbjerg, will remain. It comes in response to a campaign launched by Palliser in December to ultimately scuttle Capricorn’s planned merger with an Israeli gas group. NewMed Energy.

Palliser, who owns almost 7 per cent of Capricorn’s shares, instead wants a big chunk of the £700m in net cash distributed to the oil and gas group’s shareholders.

Capricorn agreed to merge with NewMed in September after several of its biggest investors, including Palliser, entered into a deal protested against the previous agreement with African oil explorer and producer Tullow Oil.

Palliser called an extraordinary general meeting to be held on February 1, originally the same day the NewMed deal was to be put to a shareholder vote, to remove the seven directors.

That meeting is still planned as Palliser has proposed replacing the ousted directors with six other candidates, including Christopher Cox, the former CEO of Centrica’s oil and gas division Spirit Energy, and Hesham Mekawi, the former regional president for North Africa. BP.

Palliser claimed his preferred candidates would allow a renewed board to carry out a “comprehensive review” of Capricorn’s corporate strategy, although a vote on the NewMed deal is still due on February 22.

After that, Capricorn’s options narrowed in recent weeks other major shareholders came forward in support Palliser proposals and corporate proxy advisory groups ISS and Glass Lewis advised other investors vote against the NewMed deal.

NewMed said on Tuesday that due to the “resignation of the majority of the Capricorn board members, the partnership estimates that the probability of closing the transaction has significantly decreased.”

The board departures mark a sad end to Thomson’s tenure at Capricorn in particular. He steered the Edinburgh-based company, formerly known as Cairn Energy, through a complex and protracted $1 billion tax dispute with the Indian government, which at one stage saw the group launch legal proceedings in the US aimed at capturing nozzles belonging to the national airline of India. Dispute was coming to an end in 2021.

Capricorn said both Thomson and Smith will remain in their management roles on an interim basis to “ensure continuity of governance, oversight of operations and reporting obligations”.

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