LONDON and CALGARY, AB, Jan. 25, 2024 /PRNewswire/ — COPL Action Group (“CAG“) and Canadian Overseas Petroleum Limited (the “Company“) (CSE: XOP) (LSE: COPL).
CAG members currently own 8.1% of the issued share capital of the Company.
Shareholders of the Company formed the COPL Action Group in December 2023 as a direct result of the conduct of and decisions made by the Company’s directors (the “Directors“) led by chairman of the Board Tom Richardson.
CAG has written to the Directors on a number of occasions since 26 December 2023 in respect of the following matters:
- Failure to adhere to good corporate governance.
- Lack of independence of the Directors.
- Lack of shareholder representation on the board of directors.
- Failure by the Directors to publicly support the Company’s share price.
- Failure by the Directors to act in the best interests of the Company and its shareholders.
- Failure by the Directors to engage with shareholders and perform any sort of public relations/investor relations functions.
- Directors have consistently favoured the interests of the Company’s bondholders over the interests of its shareholders.
- Directors have allowed almost all shareholder value to be eroded, presiding over 98.5% loss of value in just 7 months.
- Company’s press release of 6 September 2023 announced that Directors would receive bonds in lieu of fees, directly aligning Director’s interests with bondholders in conflict with shareholder interests.
- Directors publicly stated on 6 September 2023 that shares would be sold at 4p, with bonds reset to the same price. On 6 October 2023, the Directors announced that the shares would now be sold at 2.6p with the bonds reset accordingly, a 35% drop from the previous announcement. CAG has very serious misgivings about the circumstances relating to this financing that have been conveyed to the ASC in Canada and the FCA in England.
- On 6 October 2023 the Company publicly announced it was fully funded through to the end of Q1, 2024. On 20 December 2023 the Company announced it was in financial difficulties. CAG wishes to know where the working capital available to the end of Q1, 2024 has gone.
- Directors have reduced the Company’s only significant source of income by stopping the injection of gas to the BFSU.
- Terms of the bonds agreed with Company’s bondholders are not compatible with the Company being successful.
- Until the Directors renegotiate the terms of the bonds with the majority bondholder, Anavio Capital Partners LLP (“Anavio“), the Company will have little or no chance of survival as the terms of the bonds are so one sided that there is little or no possibility of equity investment.
- Existing bond terms create a financial death spiral.
To date, the only formal reply by the Company to CAG has been in the form of the press release dated 10 January 2024.
CAG has written further to the Company requesting the following action:
- Immediate provision of two board seats to members of CAG by way of shareholder representation
- Immediate renegotiation of bond terms as follows:
a. Strike price revised to 6.75p.
b. Moratorium on bond conversions for at least 6 months.
c. Maximum of 10 bonds allowed to be converted in any 12 months period by Anavio.
d. All existing warrants linked to bonds cancelled. - Sufficient working capital sourced to restart gas injections at the BFSU.
In the event the Directors fail to respond positively to these requests, CAG has no confidence in the Directors and calls on the entire board to resign with immediate effect.
The Canadian Securities Exchange (operated by CNSX Markets Inc.) has not been consulted on the contents of this press release.
For further information, please contact CAG at [email protected] or Adam Sinclair on +447849160656
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