TIDMADME
RNS Number : 5582W
ADM Energy PLC
23 December 2021
23 December 2021
ADM Energy PLC
("ADM" or the "Company")
Posting of Circular and Notice of General Meeting
Further to the announcement of 14 December 2021, ADM Energy PLC
(AIM: ADME; BER and FSE: P4JC), a natural resources investing
company, announces that it will shortly be posting a circular to
shareholders convening a General Meeting (the "Circular"). This
follows receipt of a letter on behalf of a shareholder who holds in
excess of five per cent. of the Company's issued share capital to
requisition a general meeting ("GM") of the Company
("Requisition").
The General Meeting will be held at the offices of Luther
Pendragon, 48 Gracechurch St, EC3V 0EJ at 10:00 am GMT on 17
January 2022.
The Requisition proposes that shareholders be asked to consider
the following resolutions:
1. that Osamede Okhomina be removed as a director of the Company
with immediate effect;
2. that Richard Carter be removed as a director of the Company
with immediate effect;
3. that Oliver Andrews be removed as a director of the Company
with immediate effect; and
4. that Richard Jennings be appointed as a Director of the
Company with immediate effect.
The Board's unanimous recommendation is for shareholders to vote
AGAINST the proposed resolutions.
The Board has received irrevocable undertakings from a number of
shareholders, including its largest shareholder, to vote against
ALL the Jennings' Resolutions. In addition, each of the directors
intends to vote their respective shares AGAINST all of the
Jennings' Resolutions giving an aggregate total AGAINST the
Jennings' Resolutions of 66,963,742 ordinary shares representing
32.75 per cent. of the issued share capital of the Company as at
the date of this announcement.
Osamede Okhomina, CEO of ADM Energy plc, said: "On behalf of the
Board we urge all shareholders to vote against the proposed
resolutions. We have a strong board and excellent technical team in
place, which combines decades of expertise in the oil and gas
arena, aligned with extensive local knowledge of Nigeria and West
Africa.
"Our strategy remains to build shareholder value through the
pursuit of quality, value-accretive assets in West Africa, adding
de-risked 2P reserves at attractive valuations, with significant
potential upside. With our technical know-how and access to capital
through strong partners such as Trafigura, ADM is very well
positioned and we are confident we can deliver our growth strategy
for the benefit of all shareholders."
Extracts from the Circular are set out below and should be read
in conjunction with the Circular. A copy of the Circular will
shortly be available from the Company's website:
www.admenergyplc.com
Enquiries:
ADM Energy plc +44 20 7459 4718
Osamede Okhomina, CEO
www.admenergyplc.com
Cairn Financial Advisers LLP +44 20 7213 0880
(Nominated Adviser)
Jo Turner, James Caithie
Hybridan LLP +44 20 3764 2341
(Broker)
Claire Louise Noyce
ODDO BHF Corporates & Markets AG +49 69 920540
(Designated Sponsor)
Michael B. Thiriot
Luther Pendragon +44 20 7618 9100
(Financial PR)
Harry Chathli, Alexis Gore, Tan Siddique
LETTER FROM THE CHAIRMAN
Dear Shareholders
Notice of General Meeting as requisitioned by Align Research Ltd
and Fiske Nominees for and on behalf of Align Research Ltd, Richard
Jennings and Catherine Jennings
1. Introduction
On 14 December 2021, the Company announced that it had received
a notice ("Requisition Notice") by Fiske Nominees, on behalf of
Richard and Catherine Jennings, and Align Research Limited ("ARL"),
a company controlled by Mr Jennings, (together "the
Requisitionists" ) requiring the Company to convene a general
meeting ("Requisitioned General Meeting") to vote on resolutions
proposed by them by virtue of their holding of 10,904,031 shares
representing 5.33 per cent. of the Company's issued share
capital.
The Company had understood the Requisitionists to hold
11,813,122 ordinary shares, as per the notification of major
holdings received on 18 November 2020. The Board notes the
shareholding used in the Requisition Notice is lower than notified
by the Requisitionists and, in the absence of accurate shareholder
notifications advises that this position may be higher than
declared. Nevertheless, the Board considers that the documentation
received is valid and, accordingly, is posting this letter to
shareholders to give notice of its intention to convene a general
meeting for the sole purpose of proposing the resolutions proposed
by the Requisitionists.
2. Proposed Resolutions
The Requisition Notice requires the Company, pursuant to the
provisions set out in section 303 of the Companies Act 2006, to
proceed to convene a general meeting of the Company to consider
and, if thought fit, pass the resolutions set out below ( all of
which your Board recommends you vote AGAINST ):
1. THAT Osamede Okhomina be removed as a director of the Company with immediate effect.
2. THAT Richard Carter be removed as a director of the Company with immediate effect.
3. THAT Oliver Andrews be removed as a director of the Company with immediate effect.
4. THAT Richard Jennings be appointed as a director of the Company with immediate effect.
(the above resolutions are hereinafter referred to as the
"Jennings' Resolutions")
The Board's unanimous recommendation is for shareholders to vote
AGAINST the proposed resolutions.
The Board has received irrevocable undertakings from a number of
shareholders, including its largest shareholder, to vote against
ALL the Jennings' Resolutions. In addition, each of the directors
intends to vote their respective shares AGAINST all of the
Jennings' Resolutions giving an aggregate total AGAINST the
Jennings' Resolutions of 66,963,742 ordinary shares representing
32.75 per cent. of the issued share capital of the Company as at
the date of this letter.
3. The Board's assumption on the background to receipt of notice
The Requisition Notice did not set out the reasons why the
Requisitionists wish to move resolutions at the Requisitioned
General Meeting to remove the executive directors and Chairman of
the Company but the timing of its receipt coincides with an
emerging financial dispute between the Company and ARL (acting
through Mr Jennings).
The dispute concerns the terms of a debt facility agreement
entered into between ARL and the Company in August 2020 (as amended
by an amendment letter) in June 2021 ("Debt Facility Agreement")
and the terms of warrants issued to ALR in connection with the Debt
Facility Agreement. In summary, the Debt Facility Agreement
provides for the debt to be convertible at the lower of 4.25p per
share or the share price of any subsequent fundraise for the term
of the Debt Facility Agreement. In addition to repricing the
conversion price, ARL is seeking to re-price the 4,705,882 warrants
associated with the Debt Facility Agreement down to 1.5p from 4.25p
as well as rebasing its existing warrants with the effect of
seeking an additional grant of 8,842,451 warrants to an aggregate
total of 13,548,333 warrants. On top of the potential dilution for
shareholders, by way of example, were the Company to re-price the
4,705,882 warrants currently held by ARL from 4.25p to 1.5p, upon
exercise there would be unfavourable loss for the Company of
approximately GBP130,000. The Company has received clear,
unequivocal legal advice that neither the Debt Facility Agreement
nor the terms of the warrants provide for an adjustment to the
warrant exercise price or the number of warrants and as such is not
prepared to meet ALR's demands and will continue to resist
them.
It is the Board's opinion that, not having met the forceful
demands of Mr Jennings, it is being asked to requisition a general
meeting in order to replace certain key directors with himself.
4. Reasons to vote AGAINST ALL of the Resolutions
For the reasons mentioned below, the Board urges Shareholders to
vote AGAINST the Requisitionists' proposed resolutions .
Progress made by the Company will be in jeopardy
The Board believes, that should the resolutions pass, all the
progress made by the Company will be in jeopardy.
Under the leadership of Mr Osa Okhomina, the Company has:
a) Increased ADM's position in the highly strategic asset of OML
113. The Aje Field gives the Company access to reliable oil
production and contains significant wet and dry gas reserves which
command a premium in the local markets. The deal struck by the
management nearly doubled its interests. The Board believes that Mr
Jennings would not have been able to strike such a deal and does
not have the ability to advance the development of the Aje
investment.
The Company has announced plans to develop Aje. The Board
maintains that there is significant potential value in the Aje
field. However, the nature of the assets requires an intricate
knowledge of the field and the operating environment. The Board
asserts that it is the current management team that is best suited
to represent the Company's interests amongst the Aje partners as
they seek to extract the best possible outcome of this undervalued
asset.
b) Formed key partnerships with renowned companies such as
Trafigura, who could be a key funding partner for the Aje expansion
and other investment opportunities that should deliver shareholder
value in the mid to long term. As far as the Board can assess, Mr
Jennings has no such partnerships in the oil and gas sector nor
does he appear to have the ability to fund large scale
projects.
c) Assembled a high-quality technical team that has the ability
to assess multiple projects simultaneously due to their experience
gathered over several decades. They saw the opportunity and agreed
to work with the Company as a result of previous history of working
with the management team and the Board in other companies. They
have expressed to the Board they do not have any desire to work for
Mr Jennings. It is the Board's assertion that Mr Jennings does not
have the ability to recruit a technical team of such calibre and
consequently will lose the ability to assess projects
appropriately.
d) Local knowledge and expertise . Mr Okhomina has formed
several strategic alliances with local service providers that could
be utilised to significantly reduce the company's development
costs. He has also built a network of local partners that has
resulted in ADM being shown several business development
opportunities which it is currently evaluating. This local
knowledge extends across the West African region. The Board
believes that without this local knowledge and expertise, Mr
Jennings, alone, will be unable to assess the viability of future
projects.
Corporate governance issues will arise as Mr Jennings' Board
position is unclear
The Board has been substantially strengthened over recent years
and now comprises a balanced and diverse group of individuals, with
a wide range of experience of the oil and gas industry, Africa and,
importantly given the location of the Company's principal
investment, Nigeria.
Mr Jennings has not indicated that he wishes to join the Board
as Chairman, Executive Director or Non-executive Director. The
Board believes that Mr Jennings has not thought this through
properly and demonstrates his lack of PLC board experience and
understanding of corporate governance issues. The Company could be
seen to fail its corporate governance commitments under the QCA
code.
In addition, in the event that all of the Jennings' Resolutions
are passed, it is likely that the Company will be unable to
discharge its management and operating duties which may have
broader regulatory and operational consequences.
5. The Requisitioned Meeting
Set out at the end of this document is a notice convening the
Requisitioned General Meeting to be held at 48 Gracechurch Street,
London EC3V 0EJ at 10:00 a.m. on Monday 17 January 2022 at which
the Jennings' Resolutions will be proposed.
The independent directors, together with the remaining Board,
consider that the Jennings' Resolutions are NOT in the best
interests of the Company, its shareholders as a whole and other
stakeholders. Accordingly, the Board, including the independent
directors who are not subject to a resolution to remove them as a
director, recommend that shareholders VOTE AGAINST each of the
resolutions to be proposed at the General Meeting.
6. Action to be taken by Shareholders
Shareholders will find with the Notice of Requisitioned General
Meeting in this document a Form of Proxy for use in connection with
the Requisitioned General Meeting. You are urged to complete, sign
and return the Form of Proxy in accordance with the instructions
printed thereon as soon as possible, but in any event to so as to
be received by post or, during normal business hours only, by hand,
by the Company's registrars, Computershare Investor Service PLC, at
The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, as soon as
possible and by no later than 10:00 a.m. on 13 January 2022 (or in
the case of an adjourned Requisitioned General Meeting, not later
than 48 hours before the time fixed for the holding of the
adjourned meeting (excluding any day that is not a business
day)).
Given the current heightened risk of COVID-19 infections (and
the resultant regulatory changes) which could endure during the
period in which this Notice of Requisitioned General Meeting is
sent and the date of the General Meeting and to protect our
employees, local community and shareholders' welfare we are
encouraging all shareholders to vote on all resolutions by
appointing the chairman of the Requisitioned General Meeting as
their proxy.
7. Recommendation
For the reasons given above, the Board, including the
independent directors who are not subject to a resolution to remove
them as a director, consider that the Jennings' Resolutions are not
in the best interests of the Company, its shareholders as a whole
and its other stakeholders. Accordingly, the Board, including the
independent directors, therefore recommend that shareholders VOTE
AGAINST each of the Jennings' Resolutions to be proposed at the
Requisitioned General Meeting. Your Board will be voting AGAINST
the Jennings' Resolutions to be proposed at the Requisitioned
General Meeting.
Yours faithfully
Oliver Andrews
Chairman
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END
NOGFELEFEEFSEDE
(END) Dow Jones Newswires
December 23, 2021 02:00 ET (07:00 GMT)
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