|By PR Newswire||
|March 27, 2014 12:57 PM EDT||
LONDON, March 27, 2014 /PRNewswire/ -- Natlata Partners Limited ("Natlata"), the private investment company that is the largest single shareholder in Petroneft Resources PLC ("Petroneft" or "the Company") (AIM: PTR) announces that the Board of Petroneft has summarily rejected the new financing proposal that they sent to the Company on 20 March 2014.
Furthermore it is now more than two weeks since Natlata delivered its requisition for an EGM to vote on the Company's future. Natlata has received no communication from the Company regarding the questions asked on 17 March 2014. Nor has Natlata seen any notice of the meeting being sent to shareholders.
We believe Natlata's new financing proposal provides a genuine solution to restructure the Company's finances. Our proposal will see the Macquarie debt refinanced and converted into equity. Such a recapitalization will immediately release free cash which can be redirected to satisfy the current capex requirements. Lower leverage will open doors for new debt financing at better terms and we already have preliminary appetite from a number of banks for this. We have been approaching the management with our solution since last year but unfortunately the Board has rejected all our attempts at engagement on refinancing, not even trying to negotiate or discussing any details of the proposal.
Maxim Korobov, Natlata's controlling shareholder, said, "We believe the current management is to blame for getting the Company into the current dire financial situation and has delivered nothing except endless repetition of "encouraging progress on financing". In addition they have completed a stealth capital raise after receiving an EGM requisition from Petroneft's largest shareholder, without any disclosure on the beneficiaries of the placing, in yet another illustration of non-transparent and questionable management. They have then followed-up by summarily rejecting a refinancing proposal at a higher price than this recent placement.
"The management, with their ca. 8.5% shareholding in the Company, have been making decisions on behalf of the other 91.5% for far too long. Are they acting in the interests of all shareholders? Or do they have their own agenda, ignoring everyone else? The results of their actions tell us that the core problem the company has is bad management. Any sort of Company refinancing will not solve the fundamental people problem with the current management in charge. This is the main reason we requested the EGM.
"The current debt issue the company is facing is temporary and short-term. We are ready and willing to solve it now. But it is high time we addressed the real long-term issue - the management."
About Natlata Partners Limited
Natlata Partners is a private investment company that seeks out investments with a focus on Russia and CIS countries that appear to be distressed or are at an early stage of development and which will clearly benefit from effective management and proven sector experience. For more information about Natlata and our investments please contact [email protected]. More details on our proposals for Petroneft can be found at www.value4petroneft.com.
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