LONDON (ShareCast) - (ShareCast News) - Bowleven updated the market on Wednesday, saying that following the requisition of a general meeting on 24 January, Monaco-based private investment vehicle Crown Ocean Capital had continued to purchase Bowleven stock.
The AIM-traded firm said in view of that, and ahead of the more detailed response within the circular convening the GM, it wanted to advise all shareholders of its view of the proposals and why it will unanimously be recommending shareholders vote against all resolutions.

"In the meantime, shareholders are urged to support their board and take no immediate action with regard to their holdings," Bowleven's board said in its statement.

It said COC's intent was to take control of Bowleven without paying fair value, and it had "no credible strategy" to maximise the value from the company's key assets, Etinde and Bomono.

COC's stated intention, according to Bowleven, would be to convert Bowleven into a holding company, stripping the cash from Bowleven's balance sheet, and leaving it in a "precarious position" potentially unable to fund the investment necessary to realise any or all value from its Cameroon assets.

It alleged COC intended to remove the existing board and appoint their own representatives, placing the management of the company in the control of a single minority shareholder, with no remaining independent directors representing the interests of shareholders .

"This is exceptionally poor governance, delivering stewardship of the company into the hands of unvetted COC appointees and removing all governance safeguards for other shareholders.

"The board will lose vital relationships with the Cameroon government, key to progressing the assets and realising value, and lose its entire relevant oil & gas experience and industry relationships," the board explained.

It explained that throughout its near-year long involvement with the company, COC had displayed "utter inconsistency", with its first approach, in August 2016, to advocate an MBO.

It "desisted" when management made it clear the offer price must be at a level the board could recommend, Bowleven said.

COC's second approach was to support the existing management team, chairman and strategy, and to impose new non-executive directors, but Bowleven said the legal procedures were "defective".

Its third approach was to dismiss all board members, except the chief operating officer, who they reportedly had previously sought to dismiss.

"Ahead of our formal response, we wish to give timely advice to shareholders that COC's proposal has absolutely no merit," commented chairman Billy Allan.

"It is self-evidently, and solely, a means to turn Bowleven into a cash dispenser for themselves, by taking control of the board."

Allan said, by contrast, the company was progressing "exciting" plans at Etinde and Bomono that had the potential to deliver material upside.

"We see a clear choice for shareholders between losing control of the company, or retaining substantial upside in an E&P company at a favourable point in the market cycle."

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