RCS - Reabold Reqstn.Shldr - Requisition of GM of Reabold Resources plc

Reabold ResourcesAnnouncement

01/11/2022 08:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221101:nRSA8189Ea&default-theme=true

RNS Number : 8189E  Reabold Requisitioning Shhldr. Grp.  01 November 2022

RNS REACH

01 November 2022

Reabold Resources plc Requisitioning Shareholders Group

RE: Requisition of general meeting of Reabold Resources plc

Beneficial owners representing 6.93% of the issued share capital in Reabold
Resources plc ('Reabold' or the 'Company') (AIM:RBD), whose shares are
registered in the legal name of Pershing Nominees Limited (the 'Requisitioning
Shareholders'), confirm they have served notice on the board of directors of
the Company to convene a General Meeting ('GM') of Reabold's shareholders to
pass resolutions focussed on creating sustainable shareholder value in the
interests of all Reabold's shareholders and other stakeholders.

To enable positive strategic change and increased shareholder value, the
Requisitioning Shareholders believe that the following actions must be taken:

·      The Board must be changed to increase alignment between the Board
and the Company's shareholder. The Requisitioning Shareholders believe that
the current lack of clear leadership and accountability is impeding value
creation, while CEO remuneration is excessive and unjustified given the
current performance.

o  The incumbent directors all be removed from the board.

o  The Requisitioning Shareholders have proposed that, in place of the
incumbent directors, Kamran Sattar, Cathal Friel, Francesca Yardley, and John
McGoldrick (together, the 'Proposed Directors') be appointed to the Board.
Francesca and John meet the test for being independent non-executive directors
as recommended in the Pensions and Lifetime Savings Association Stewardship
& Voting Guidelines dated February 2022. If they are appointed to the
Reabold board, the Proposed Directors will each forgo any cash payment for
directors' fees and will instead be remunerated with £25,000 in equity for
the first 12 months.

o  A CEO, with relevant industry experience, be appointed to lead the
Company.

·      The Corporate Governance policies require robust changes to
restore credibility in Reabold's governance practices. The Proposed Directors
would urgently address several material deficiencies from recommended best
practice that have been notified to the incumbent Board, most notably relating
to the independence of the Chairman and director remuneration considerations -
specifically the extension of share option expiry dates and the absence of
performance conditions for long term incentive awards.

·      The Company must realise greater value from its projects than it
has previously, particularly the West Newton Asset. As such, the Proposed
Directors would rapidly seek an experienced farm out partner to significantly
de-risk the asset and help Reabold realise value in the next 6-12 months.

·      New, non-dilutive, funding initiatives should be pursued to
accelerate and maximise monetisation of the Company's assets.

·      Cash must be returned to shareholders. We are satisfied that the
Company has publicly announced that it will return £4m to shareholders.
However, we note that this is subject to receipt of the second tranche of the
proceeds from the share sale of Corallian Energy which is subject to the
development and production consent from North Sea Transition Authority on or
before 1 December 2023.

Historic Management Failings

The sale process of Corallian Energy was completed at significantly lower
value than expected. Based on Corallian's historic average gas price
valuations of the Victory licence, the Requisitioning Shareholders, no doubt
together with the significant majority of other shareholders, expected a
substantially higher sale price given the 2C economic valuation range of
£146m to £193m. However, the final sale price was only £32m. Despite
Reabold owning 49.99% of the share capital of Corallian Energy, net proceeds
were only c.£12.7m. It is not clear how much of this is related to
transaction fees, and how much relates to excessive fees and options payable
to the board of directors of Corallian. Furthermore, one of the co-CEOs is a
director of Corallian Energy. There are clear concerns that the directors of
Corallian Energy may have been financially incentivised to pursue the sale and
therefore declined to explore other, potentially more suitable and value
accretive transactions, to the significant detriment of Corallian shareholders
- specifically Reabold.

In 2021, the co-CEOs were remunerated a combined £716k. In this year the
share price dropped from 0.64p to 0.17p, a 70% decline. Reabold's annual
report for the year ended 31 December 2021 stated: "During the reporting
period, the Board undertook a performance evaluation of the Executive
Directors. The salaries were benchmarked to market and the committee
considered the delivery of our strategic goals." The rapidly declining share
price and loss for the year of £2.675m is completely at odds with this
assessment. The Requisitioning Shareholders believe it shows a complete lack
of independence by the incumbent non-executive directors together with a
collective willingness for the incumbent directors to be remunerated to an
excessive degree to the significant detriment of the Company's shareholders.

Furthermore, neither co-CEO holds a significant shareholding in the Company.
Their combined shareholding accounts for less than 1% of the Company's issued
share capital, creating a clear lack of alignment between their
incentivisation and the best interests of Reabold's shareholders.

Requisitioning Shareholders presentation

A presentation from the Requisitioning Shareholders outlining the historic
failings of the incumbent directors, current strategic weaknesses and the
Requisitioning Shareholders' proposed strategy can be found at
www.reaboldrequisition.com (https://www.reaboldrequisition.com/)

The Requisitioning Shareholders strongly encourage all Reabold shareholders to
support their proposals for change and VOTE IN FAVOUR OF ALL RESOLUTIONS TO BE
PROPOSED AT THE GENERAL MEETING.

Contacts

 Requisitioning Shareholders
 Kamran Sattar                02077 121 518
 Portillion Capital           kamran.sattar@portillioncapital.co.uk

 Media and Investor           07748 325 236
 Nick Rome                    Nick.rome@walbrookpr.com (mailto:Nick.rome@walbrookpr.com)

 

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word “Reach” in the source column of the News Explorer pages of London Stock Exchange’s website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NRABKDBQKBDBDKN