A storm is brewing at Hurricane Energy PLC (LON:HUR) as activist investor Crystal Amber Fund has called for an extraordinary general meeting to oust five non-executive directors and put its own two appointees in place.
The fund, which owns 14.7% of the company, said it had provided it with funds totalling GBP25mln in three tranches since 2013 but had since lost faith in the board.
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Relations had deteriorated over the past six months, and the fund had called for senior resignations which did not happen.
AIM-listed Crystal Amber (LON:CRS) said the board had “failed to reconcile its earlier estimates of the value of Hurricane’s West of Shetland portfolio with its latest, downbeat assessment.”
Hurricane has proposed a financial restructuring but the fund said this would lead to Hurricane being put into “an extended wind down and shareholders’ interests in Hurricane will be wiped out almost completely in favour of the bondholders.”
It added: “During the last fortnight, the fund has requested sight of the legal advice provided to the Hurricane board in relation to the restructuring. Hurricane has refused. All shareholders are entitled to receive and consider that legal advice.”
It concluded: “The fund believes that Hurricane’s future prospects would be greatly improved with the removal of the current non-executive directors and the appointment of the fund’s nominees.
“Whilst the fund lacks confidence in the executive directors, it believes that their technical and financial knowledge of the current situation means they should continue in office for the time being.”
Hurricane responded: “The board is considering the content of the requisition notice, which it intends to respond to in accordance with the requirements of the [Companies] Act.”
In anticipation of the action Hurricane’s shares almost doubled, up 0.67p to 1.4p.