The battle of words between Bowleven, an Africa-focused oil and gas company, and Crown Ocean Capital (COC), its largest shareholder, rages on as Bowleven issued a rebuttal on Friday to claims made by COC earlier this week.
The Monaco-based activist investor, which now holds 16.2% of Bowleven, in January proposed two new, fully independent directors and a reduced board size of three directors at Bowleven after which the UK-listed player called for a general meeting of the company. The meeting is to take place in Edinburgh on March 14, 2017.
In early February, Bowleven started urging its shareholders to vote against all resolutions made by COC claiming its intent was to take control of Bowleven without paying fair value and with no credible strategy to maximize the value from the company’s key assets, Etinde and Bomono.
In an open letter to Bowleven’s shareholders, COC on Wednesday pointed out to fundamental issues with Bowleven. Namely, the activist shareholder stated that the interests of Bowleven’s board and its shareholders were not aligned, that Bowleven was wasting cash, and lacking shareholder value-oriented strategy.
COC also said the company’s directors received aggregate remuneration of an estimated $44 million over the last 10 financial years.
Furthermore, COC asked for support of its proposition to focus on “prime asset” Etinde, located offshore Cameroon, and work to prove more reserves and develop the field. COC also asked for a review of the company’s other asset in Cameroon, the onshore Bomono permit.
COC noted that over $100 million were spent on Bomono project, “without there having been shown convincing economic prospects, nor having secured a long-term exploitation authorization.”
The shareholder also noted the company’s organization and the corporate overhead should be “shrunk radically.”
COC emphasized that what it was doing was not a takeover proposal or an attempt by one shareholder to gain ‘control’. It also brought into question the independence of the company’s board, stating it was working in the interest of all shareholders, and suggested the election of two new independent directors.
Bowleven strikes back
In its rebuttal on Friday, the London-listed player said it did not want to get involved in a series of public claims and counterclaims. However, the company said the Wednesday letter by COC contained ten “significant errors” which could not pass unchallenged.
Bowleven claimed its directors were awarded remuneration totaling $33 million over ten years and not $44 million as COC previously said. Furthermore, the company challenged COC’s claim of the board’s “questionable independence.”
Referring to COC’s nominees to the board, Bowleven said the structure and composition of the proposed COC board, comprising the two COC nominees and David Clarkson, would not be compliant with the UK Corporate Governance Code or the QCA Corporate Governance Code.
The board reiterated its recommendation that shareholders vote against all COC’s resolutions at the general meeting next month.
Offshore Energy Today Staff