African oil explorer Bowleven (BLVN) gains 5.7% to 26.4p as it faces pressure from an activist shareholder to oust the majority of its board and shift its strategy.
Monaco-based Crown Ocean Capital is calling for a general meeting in order to remove six members of the current seven-strong board including chief executive Kevin Hart and chairman Billy Allan.
WHY THE CALL FOR CHANGE
The investor has built a 13% stake in Bowleven and forced a halt to a $10m share buyback scheme last year.
The main issue seems to revolve around the use of the $165m the company booked from the farm out of its Etinde field offshore Cameroon in 2015.
Bowleven still owns 20% of Etinde and Crown Ocean wants to focus on this asset, with excess cash returned to shareholders and spending on the Bomono project onshore Cameroon to cease.
It is also calling for an independent review of the $100m it says has been spent on Bomono already.
REMUNERATION CONCERNS
In its statement Crown Ocean adds: ‘Over the last 10 financial years, Bowleven had an estimated $550m of cash outflows (net of farm-out proceeds) including an aggregate remuneration of the directors of an estimated $44m, whilst Bowleven's equity interest in Etinde dropped from 100% to 20%.’
In response Bowleven says: 'The board firmly believes that the resolutions are not in the best interests of Bowleven's shareholders as a whole.
'The proposal to constitute a board of three individuals, two of whom have little or no relevant oil and gas experience is clearly incompatible with good corporate governance.
'The existing board and company is well-positioned to deliver on its strategy as set out in its recent results and deliver greater value than a break-up and asset strip of the company would achieve.'
