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Case study

ico-other.pngWorldview Capital LLP

Location: Cayman Islands

Deal Type: All cash offer, debt purchase and examinership acquisition of 100% of Petroceltic International plc

Deal Size: US$240m 

 

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The Company was severely constrained by its significant indebtedness, with c.US$200m (the “Senior Bank Facility”) owed to HSBC, IFC, Nedbank and Standard Chartered (the “Banking Syndicate”), which increased rapidly, to over US$230m, by March 2016. Petroceltic had been in breach of its debt covenants for over a year and recurring waivers had had to be granted by the Banking Syndicate.

Strand Hanson advised Worldview on its negotiations with both the Board of the Company and, separately, the Banking Syndicate, regarding the potential provision of a new debt facility to recapitalise the Company, in exchange for, inter alia, certain changes to the Board and assistance in the process of obtaining the requisite regulatory/shareholder approvals.

Following a breakdown in negotiations, Strand Hanson advised Worldview on its hostile takeover of the Company (the “Offer”), which was launched at a discount of more than 80% to the then market price, signifying Worldview’s belief that the Company’s equity was almost worthless. During the Offer period, the Company’s financial condition was worsening and Worldview petitioned for Petroceltic to enter into a protective Examinership process under Irish law, leading to the Company’s suspension from trading on the AIM and ESM markets. Shortly thereafter, Worldview acquired the majority of the Senior Bank Facility from two of the Banking Syndicate members, at a significant discount to face value and effectively took control of the Examinership process, thereafter lapsing the Offer with 55% valid acceptances received.

Ultimately, following a complex series of negotiations, with multiple parties and advisers, across several jurisdictions and legal/regulatory regimes, spanning a six month period, Worldview, advised by Strand Hanson, obtained 100% control of the Company via the Examinership route, at a significant valuation discount to the equity and enterprise valuation of the Company at the commencement of the process.