* Exillon to hold EGM after request from shareholder
* EGM to consider removal of chairman, appointment of three
* Shares fall 8 pct
By Sarah Young and Megan Davies
LONDON/MOSCOW, Jan 14 Russia-focused oil
producer Exillon Energy is to hold a shareholder
meeting to consider a proposal for a management shake-up at the
London-listed company by one of its biggest investors.
The shareholder, Worldview Capital Management, which said it
owns a 13 percent stake in Exillon, has called for a management
overhaul and strategic review amid what it described as "board
inexperience" and "significant underperformance".
A shareholder vote at the extraordinary general meeting
(EGM) will consider the removal of chairman David Herbert and
the appointment of three new directors proposed by Worldview,
"We have been trying to engage with the board in a very
constructive way since May," said Andrey Kruglykhin, founding
partner of Worldview, which initially invested in Exillon in
"Unfortunately the board has little will to implement any
change. They also deny the existence of any problem."
Shares in Exillon have halved in value in the last 12
months, trading down 8 percent on the previous session at 134
pence by 1510 GMT on Monday, valuing the firm at around 217
million pounds ($350 million) according to Thomson Reuters data.
The shares hit a low in June last year of 86 pence.
Exillon said in a statement that it has engaged extensively
with Worldview over the past seven months and that all the
matters raised are "public information, and in most cases have
been public information for over a year".
Exillon's EGM comes amid growing investor concerns in London
about some companies in the natural resources sector. While such
companies have increasingly dominated the trickle of businesses
going public in London, high profile difficulties at some of
those companies, such as Indonesian miner Bumi, have made
investors more wary.
Exillon, which has assets in Russia's oil-rich regions of
Timan-Pechora and Western Siberia, is one of a clutch of oil
independents working in Russia, the world's largest oil producer
where the top six firms, led by state-owned Rosneft,
account for nearly 70 percent of output of 10.5 million barrels
per day (bpd).
The company, which pumped 16,000 bpd in December from its
two Russian fields, has acknowledged that its volatile monthly
output figures have been a matter for debate with its
shareholders and that it will switch to quarterly reporting.
In a letter made public on Monday, Switzerland-based
Worldview said that it believed Exillon's chairman and its chief
executive, Mark Martin, lacked experience in the oil sector,
which had resulted in production setbacks.
Herbert was previously Head of International Corporate
Finance at ING Bank and has worked for more than 10 years at BP
, according to Exillon's website. Martin previously ran
Equity Capital Markets at ING and led a number of deals for oil
and gas clients in Russia, the web site said.
Worldview also raised concerns about the role of the
company's former executive chairman Maksat Arip, a Kazakh
businessman who owns 30 percent of Exillon and who was formerly
chief executive of Kazakhstan Kagazy, another
Exillon, which floated in London in December 2009 with a
placing at 153 pence a share, was fined nearly 300,000 pounds
last April for failing to disclose payments made to Arip when he
"We are not coming to rock the boat, we are trying to
protect our investments, make sure investor confidence is
restored and add value to the board," said Kruglykhin.
Analysts at Mirabaud said in a research note that while
Exillon has suffered setbacks in the past, "it is hardly an
exception to the rule and recent operational performance on the
ground has been strong".
"Indeed, we would argue that the outlook for Exillon is
rosier than it has been for some time making the timing of the
requisition seem a little strange," said Mirabaud.