High Court confirms examiner for Petroceltic

Application faced no opposition

Brian O’Cathain, Petroceltic chief executive, speaks at a company meeting.  Photograph: Sara Freund / The Irish Times

Brian O’Cathain, Petroceltic chief executive, speaks at a company meeting. Photograph: Sara Freund / The Irish Times

 

The High Court has confirmed examinership for troubled exploration company Petroceltic and two related companies.

There was no opposition to the application, brought by minority shareholder Worldview which, the court heard, had earlier this week acquired further debt of Petroceltic.

Rossa Fanning BL, for Petroceltic, said the petition was presented last month in “somewhat unusual circumstances” but his client, which acted appropriately at all times, was supporting examinership.

Counsel said cricticism in the petition of the present management of the company were “without justification” for reasons including that management could not be held responsible for the collapse in the price of oil.

His side had not sought to respond to that criticism as that “would serve no purpose” but the criticism was not accepted, Mr Fanning said.

Mr Justice Brian McGovern was told two secured lenders of Petroceltic, NBSA Ltd and Standard Chartered Bank, owed $230 million (€202m), who previously expressed concerns about some issues arising from the petition, were not pursuing those concerns.

The lenders had sold their interest in the relevant loans to Worldview, the court heard.

Worldview

Paul Gallagher SC, for Worldview, said it had in affidavits addressed the relevant concerns, including claims of a want of good faith in bringing the petition arising from the fact another Worldview entity, Sunny Hill, had made an offer for Petroceltic. That offer, along with any other offers, would be considered by the examiner, he said.

Gavin Simons, solicitor for Elbrus Capital (Cayman) Ltd, a fund based in the Cayman Islands to which Worldview has sold debts of Petroceltic, said it was supporting the petition.

In court documents, it was stated that, under transfer agreements, Worldview, Elbrus Capital Cayman and the minority lenders — NBSA and Standard Chartered Bank — will all be lenders of record under a common terms agreement (CTA) and, therefore, secured creditors of Petroceltic and other companies in the Petroceltic group in respect of sums outstanding under the agreement.

The amount of the transfer also means Elbrus Capital Cayman’s economic interests under the CTA are greater than those of the minority lenders, meaning no collective action on behalf of the lenders without consent of Elbrus Capital Cayman, it was also stated.

The court also heard there was no opposition to examinerhsip from the Revenue Commissioners. Petroceltic, the court heard, is tax compliant.

Going concern

The judge was also told an independent expert’s report expressed the view Petroceltic has a reasonable prospect of survival as a going concern provided certain conditions, including securing investor funding and approval of a scheme of arrangement, are met.

Having heard the parties, the judge said he was satisfied to confirm Michael McAteer, of Grant Thornton, as examiner.

The petition was brought by Worldview EHS International Master Fund, with registered offices in the Cayman Islands, seeking protection for Petroceltic International plc and related companies, Petroceltic Investments Ltd and Petroceltic Ain Tsila Ltd.

Petroceltic employs 13 staff at its Dublin headquarters and 128 others in offices in several countries.

Kelly Smith BL, for Mr McAteer, who was appointed interim examiner last month, said there may be applications to extend protection to other companies in the Petroceltic group.

She said creditors and staff of Petroceltic had responded positively to Mr McAteer’s appointment, some cost savings have been achieved and Worldview has provided some $7.2 million in funding support during the period of court protection. There was a need for funding from a potential investor and Worldview and other proposed investors had come forward in that regard, she added.

After counsel said Mr McAteer wanted an extension of time to pursue and finalise an investment agreement and survival proposals, the judge agreed to extend court protection to May 12th.