High Court appoints interim examiner to Petroceltic

Move follows discussions between the exploration firm and shareholder Worldview

Brian O’Cathain, Chief Executive Officer of  Petroceltic: the High Court appointed an interim examiner to the exploration company on Tuesday

Brian O’Cathain, Chief Executive Officer of Petroceltic: the High Court appointed an interim examiner to the exploration company on Tuesday

 

The High Court has appointed an interim examiner to troubled exploration company Petroceltic and two related firms.

Mr Justice Brian McGovern appointed Michael McAteer, of Grant Thornton, as interim examiner on Tuesday on the application of the company itself and of a minority shareholder, Worldview.

The move followed discussions between Petroceltic and Worldview after the latter decided last Friday to bring, without notice to Petroceltic, a petition for court protection and examinership.

Worldview EHS International Master Fund, with registered offices in the Cayman Islands, sought protection for Petroceltic International plc and related companies, Petroceltic Investments Ltd and Petroceltic Ain Tsila Ltd.

Viable future

Petroceltic employs 13 staff at its headquarters at Grand Canal Street Upper, Dublin, and 128 others in offices in several countries.

Based on an independent expert’s report, the court heard it is believed the companies have a viable future as a going concern subject to certain conditions including approval of a scheme of arrangement.

The petition was returned to April 4th but Rossa Fanning BL, for Petroceltic, told the judge on Tuesday his side was not opposing examinership as they considered that in the interest of the companies.

While there was no application for an interim examiner last Friday, both Petroceltic and Worldview wanted an interim examiner appointed now, he said.

Interim examiner urgently needed

Moving that application, Lyndon MacCann SC, for Worldview, said it had not sought an interim examiner on Friday because of the urgency of bringing the petition. It had had discussions since with Petroceltic whose chief executive Brian O Catháin believed an interim examiner was urgently needed to deal with queries from creditors and others about the examinership process and address funding issues allowing it continue to trade while under court protection.

James Doherty BL, for the syndicate of banks providing funding to Petroceltic, indicated they were not contesting the application but were reserving their position while they considered information on the financial position of the companies.

Matters of concern included a “black hole” in the independent expert’s report accompanying Worldview’s petition, and in the papers in general, in relation to funding issues, Mr Doherty said.

The syndicate was owed US$230 million dollars and Worldview had said its petition was precipitated due to the expiry of the last waiver provided by the syndicate and before negotiations on an extension of a further waiver were concluded, counsel said. An affidavit on behalf of Worldview also referred to US$33.4 million cash balances in the Petroceltic group.

Worldview knew its petition would crystallise funding difficulties for the group and the syndicate was concerned to ensure Worldview, as it had indicated, would provide funding for Petroceltic during the examinership period, he said.

Independent expert’s report

The independent expert’s report indicated some €20 million was required with some €4.6 million needed this week to meet salary and other payments. The syndicate’s concern was Petroceltic seemed to want an interim examiner so they can negotiate with Worldview about funding for examinership. His side believed there should be no negotiations when Worldview had said the money will be provided.

Mr MacCann said the independent expert’s report was based on the information available to Worldview as an outsider looking in. It was not seeking an interim examiner on the basis that was necessary to unlock funds or as “a precondition to anything”. Worldview had said it would make funds available for examinership and this application was ultimately for the benefit of the general body of creditors.

Mr Justice McGovern said he would appoint Mr McAteer interim examiner over the three companies and retain April 4th as the return date. Court protection for the companies continues. He also granted liberty to apply should any issues arise.