In an update to shareholders about the general meeting in Edinburgh on 14 March, chairman Billy Allan reiterated that the board believes Crown Ocean Capital’s proposals for major changes at the company are “without merit”.
Crown Ocean has built up a stake of more than 15 per cent in Bowleven, which is headed by chief executive Kevin Hart.
It has questioned the firm’s strategy, track record and board composition and its resolutions look to replace most of the board members and convert the Africa-focused business into a holding company. But Allan said Crown Ocean’s approach “lacks any strategy to maximise the value of Bowleven’s assets and disregards the vital need for a board to serve all shareholders”.
“Crown Ocean proposes a board structure that is entirely self-serving and a model of bad governance. Their intent is to create a holding company, stripping Bowleven’s cash for its own benefit and effectively removing any viable option to realise the value inherent in the company’s assets,” he added.
Bowleven said it already has a board “compliant with applicable corporate governance standards” and which provides shareholders with effective and appropriate governance for their investment.
It also said it was financially well-placed to take advantage of opportunities in the oil and gas sector.
“The current downturn in the industry has created an opening for debt-free companies with cash, such as Bowleven, seeking new venture opportunities,” it argued.
It added that the company continues to “exert rigour in the evaluation of potential transactions to ensure value is created for shareholders whilst protecting balance sheet strength”.
Analysts at Edison Investment Research, of which Bowleven is a client, said yesterday that while Crown Ocean’s “stated intentions of raising the share price are laudable” they added that they believe many of the actions it calls for are already in place or are counter to the long-term health of the company.
A requisition for a general meeting was issued by COC on 24 January. At the time it highlighted what it described as “significant shareholder value destruction” over the past decade and questioned the independence of the board.