Angry Metgasco shareholders preparing for revolt
A GROUP of disgruntled Metgasco shareholders is gearing up to scuttle plans by the Metgasco board to approve the NSW Government’s $25 million buyout offer of its Northern Rivers exploration licences.
The rumblings come less than two weeks before a final vote on the buyout at a shareholder meeting in Sydney on December 16.
Byron Bay shareholder John Vaughan said the no-vote group was led by locals who had seen their long-term investment in the company destroyed by the NSW Government’s regulatory flip-flopping.
More than 20% of Metgasco shareholders live on the Northern Rivers, according to Mr Vaughan.
“The State Government with all their changes and flips have made it impossible for (Metgasco) to operate, and now the State Government having decided they wanted to end gas up here have offered this pathetic price,” Mr Vaughan said.
“It’s a pittance.
“Metgasco has spent $125 million on exploration and development, they’ve got a DA for a production licence, they have a huge resource, and the only thing stopping it is government regulation.
“It’s like a third world country.”
Under corporate law the company was obliged to publish a statement by the anti-buyout group in its recent Notice of Meeting for the December 16 vote.
In it, the group slams the risks of doing business in NSW as akin to the African republic of Gabon.
The group argues that shareholders had endured “a series of unpredictable and contradictory regulatory rulings from the NSW Government”, a failure to follow procedural fairness, unlawful cancellation of the Bentley well “which may be the only non-CSG gas in the State of NSW”, and an “attempt to smear the company” through an unsubstantiated reference to ICAC.
It describes the $25 million as wholly inadequate” to compensate the company’s for its $100 million plus expenditure on the licences to date.
“The actions of the NSW Government have hindered the normal commercial development of our Company, damaged its future prospects, destroyed its equity market valuation… and caused substantial financial and emotional distress to shareholders,” the statement says.
But hopes of a no-vote could be in vain, with a major shareholding bloc controlling 18% of the company in support of the government’s offer.
Also, Mr Vaughan said former major shareholder ERM had off-loaded its shares in the last month and they had been taken over by “vulture capitalists”.
Metgasco shares are trading at around 5.2c per share, but are understood to be worth 7.2c on paper taking into account the $25 million on offer.
That equation sets the company up to be taken advantage of by opportunistic speculators seeking a quick return.
The “vulture capitalists” had an unlikely common interest with anti-gas protesters because both groups wanted to see Metgasco dismantled – although for very different reasons.
“They’re rolling in to chase the cash,” Mr Vaughan said of the corporate predators.
“They’ve come in at about an average price of 5.2c a share (so) they’re taking 25% which is not bad for six months’ work.”
The local no-vote group wants the government to pay Metgasco in full for its entire exploration investment of $116 million, reserve the first right of refusal for the company to take up the licences again in the future, and to guarantee shareholders in perpetuity royalties of 10% from any gas extraction from the PELs in the future.