TIDMHAWK
RNS Number : 8948P
Nighthawk Energy plc
31 May 2018
31 May 2018
Nighthawk Energy plc ("Nighthawk" or "the Company")
Notice of General Meeting
Further to the announcement of 10 May 2018, Nighthawk, the US
focused oil development and production company (AIM: HAWK and
OTCQX: NHEGY), announces that a circular containing a notice
convening the requisitioned general meeting (the "Circular") is
today being despatched to Shareholders. The Circular will be
available to view at www.nighthawkenergy.com.
The General Meeting is to be held on 28 June 2018, at the
offices of Greenberg Traurig, LLP, The Shard, Level 8, 32 London
Bridge Street, London SE1 9SG commencing at 3.00 p.m.
The current Board does not support the Resolutions.
Enquiries:
Nighthawk Energy plc
Rick McCullough, Chairman +1 303 407 9600
Chris Kohler, Interim
Chief Financial Officer +44 (0) 20 3582 1350
Stockdale Securities
Limited +44 (0) 20 7601 6100
Richard Johnson
Edward Thomas
The following text is extracted from the Circular:
1. Introduction
On 10 May 2018 we announced that Chase Nominees Limited (acting
in its capacity as Nominee for Nordea Bank, S.A.) served a notice
on the Board under section 303 of the Companies Act 2006, requiring
the Board to convene a general meeting to consider resolutions to
appoint Johan Claesson and Johan Damne as directors of the Company,
and to remove Richard (Rick) McCullough and Charles (Chuck) Wilson
from office as directors of the Company.
The purpose of this document is to provide Shareholders with
background information on the Chapter 11 process and the current
Board's position on the Resolutions to be proposed at the General
Meeting, notice of which is set out at the end of this
document.
2. Background to and reasons for the Board's position on the Resolutions
The current Board opposes the removal of Rick McCullough and
Chuck Wilson as directors of the Company, and the election of Johan
Claesson and Johan Damne as directors of the Company) in their
place. Mr. Claesson, who was previously a director of the Company,
resigned his role in November 2017 because his individual and
beneficial position as a creditor and shareholder of the Company
(and having expressed an interest in entering into a potential
restructuring transaction with the Company) created a conflict of
interest relative to other creditors and shareholders. That
conflict remains today.
As the Company entered the zone of insolvency, the focus of the
Board's fiduciary duty to the Company and its shareholders expanded
under applicable law to include the creditors of the Company. The
Board believes, after lengthy and intensive marketing of the assets
of its operating subsidiary, Nighthawk Production, LLC, that the
underlying market value of the enterprise is insufficient to cover
the amount due to its first lien holder, Commonwealth Bank of
Australia ("CBA"). Consequently, following a sale of those assets,
there likely will be insufficient proceeds to pay junior creditors
or to distribute anything to shareholders.
The Company was a victim of the documented decline in oil prices
and the unsuccessful results of a waterflood project that failed to
enhance production. This all resulted in breaches of several
covenants contained in its loan agreement with CBA. Since 2014, CBA
and the Company have entered into nine separate amendments to the
loan agreement in which CBA agreed to temporarily waive such
breaches and avert foreclosure of the Company's properties.
Ultimately, this resulted in an agreement by the Company to retain
an investment banker to investigate the restructuring of the
Company and/or the sale of some or all of its assets on or before
31 May 2018. It should be noted that Mr. Claesson participated in
the negotiation of that final amendment.
The Company's investment banker identified 160 potential
counterparties of which 21 signed confidentiality agreements to
engage in diligence. Of these parties, 7 submitted letters of
intent to acquire the assets of its operating subsidiary (so called
"stalking horse" bids). Other than existing stakeholders in the
Company, no third party expressed an interest in a restructuring
plan. As a result, the Company had no choice, but to move forward
by filing a Chapter 11 bankruptcy petition under Title 11 of the
United States Code in Wilmington, Delaware. The bankruptcy process
will allow interested parties to make a proposal to restructure the
Company or purchase its assets by overbidding the "stalking horse"
selected by the Board as having offered the highest and best offer
to date. We believe that this process is fair to all
stakeholders.
Accordingly, the Board does not support the replacement of
Messrs. McCullough and Wilson and election of Messrs. Claesson and
Damne as directors. We believe that given the absence of a viable
restructuring or recapitalization plan, the current course of
action involving a sale of the operating assets under 11 USC 363(b)
is in the best interests of the Company and all its stakeholders,
and consistent with the fiduciary duties owed by directors of the
Company in the zone of insolvency.
3. General Meeting
Set out at the end of this document is a notice convening the
General Meeting to be held on 28 June 2018, at the offices of
Greenberg Traurig, LLP, The Shard, Level 8, 32 London Bridge
Street, London SE1 9SG commencing at 3.00 p.m.
The resolutions (the "Resolutions") are as follows:
Resolution 1 - to appoint Johan Claesson as a director of the
Company (who, on appointment, shall be a non-executive director of
the Company for the purposes of article 79 of the Company's
articles of association) with effect from the date this resolution
is passed.
Resolution 2 - to appoint Johan Damne as a director of the
Company (who, on appointment, shall be a non-executive director of
the Company for the purposes of article 79 of the Company's
articles of association) with effect from the date this resolution
is passed.
Resolution 3 - that Richard (Rick) McCullough be removed from
office as a director of the Company with effect from the date this
resolution is passed.
Resolution 4 - that Charles (Chuck) Wilson be removed from
office as a director of the Company with effect from the date this
resolution is passed.
4. Action to be taken
You will find enclosed with this document a Form of Proxy for
use at the General Meeting.
Whether or not Shareholders propose to attend the General
Meeting in person, it is important that Shareholders complete and
sign the enclosed Form of Proxy in accordance with the instructions
printed thereon and return it to the Company's Registrars, Link
Asset Services, at PXS 1 34 Beckenham Road, Beckenham, Kent, BR3
4ZF as soon as possible and, in any event, so as to be received not
later than 3.00 p.m. on 26 June 2018.
The completion and return of a Form of Proxy will enable you to
vote at the General Meeting without having to be present in person
but will not preclude you from attending the General Meeting and
voting in person if you so wish. If a Shareholder has appointed a
proxy and attends the General Meeting in person, his proxy
appointment will automatically be terminated and his votes in
person will stand in its place.
If you hold Ordinary Shares in CREST, you may appoint a proxy by
completing and transmitting a CREST Proxy Instruction to Link Asset
Services so that it is received no later than 3.00 p.m. on 26 June
2018.
5. Board position
The Board does not support the removal of Messrs. McCullough and
Wilson and election of Messrs. Claesson and Damne as directors of
the Company.
Yours faithfully,
Richard McCullough
Executive Chairman
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Board" the board of directors of
the Company whose names are
set out on page 4 of this
document
"CREST" the computerised settlement
system to facilitate the transfer
of title of shares in uncertificated
form, operated by Euroclear
UK & Ireland Limited
"Form of Proxy" the form of proxy for use
in connection with the General
Meeting which is appended
to this document
"FSMA" the Financial Services and
Markets Act 2000 (as amended)
"General Meeting" the general meeting of the
or "GM" Company to be held at Greenberg
Traurig, LLP, The Shard, Level
8, 32 London Bridge Street,
London SE1 9SG at 3.00 pm
on 28 June 2018, notice of
which is set out at the end
of this document
"Nighthawk Energy Nighthawk Energy plc, a company
plc", or the "Company" incorporated and registered
in England and Wales under
the Companies Act 1985 with
registered number 4000483
"Notice of General the notice convening the General
Meeting" Meeting which is set out at
the end of this document
"Ordinary Shares" ordinary shares of 0.25 pence
each in the capital of the
Company
"Resolutions" the resolutions set out in
the Notice of General Meeting
"Shareholders" holders of Ordinary Shares
"UK" the United Kingdom of Great
Britain and Northern Ireland
All references to times in this announcement are references to
London time.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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