LONDON (Alliance News) - Shareholders of Sefton Resources PLC face a difficult choice at the annual general meeting next month, as the troubled company confirmed its nominated adviser will resign next week after it agreed to overhaul its board and appoint Clement Chambers as interim chief executive.
The confirmation means the company has just over five weeks to find a new nominated adviser or risk having its shares cancelled from trading on AIM. Shareholders will have the final say by voting on the proposed board changes in November, but if they reject the proposals, they face the prospect of the company winding-up.
The news follows a meeting between Chairman Jossy Rachmantio, one of only two board members to have survived the overhaul, and incoming interim Chief Executive Clement Chambers and Michael Hodges, who will join the board as a non-executive director.
Chambers and Hodges are co-founders and CEO and executive chairman, respectively, of financial information and investor website ADVFN.
Sefton's nominated adviser, Allenby Capital Ltd, confirmed it will resign next Friday when Chambers and Hodges are officially appointed to the board.
That means Sefton will have until November 23 to find a new nominated adviser.
However, in a twist, Sefton said on Friday it will consider listing on the BritDAQ community platform if its shares are cancelled from AIM. BritDAQ claims to be the "home of unlisted companies" which links fundraisers, companies, private investors and stakeholders.
Sefton said it had looked at the option of listing on the ISDX Growth Market but said it was advised by two IDSX corporate advisers, neither being Allenby Capital, that the idea was "unlikely" to be a viable option.
In tandem with the appointments next Friday, Non-Executive Director Keith Morris will leave the board. Chief Financial Officer Raylene Whitford resigned for "personal reasons" earlier this month but stayed on in an advisory capacity. However, on Friday, Whitford confirmed she also will leave the company next Friday.
That will leave Rachmantio and Non-Executive Director Tom Milne as the only surviving board members alongside the two incoming directors. Milne will stand for re-election at the AGM, meaning his position is not guaranteed.
Shareholders face a big decision at the AGM in November, which looks likely to approve the appointments. If shareholders reject the proposal to bring in Chambers and Hodges, then Sefton will propose winding up the company.
In another blow to shareholders, the development agreement signed by Sefton and UTAS Petroleum Services Ltd back in June has been officially terminated.
The pair signed the deal with a view to identifying an producing oil and gas asset in Indonesia which Sefton could acquire, and the agreement was set to lead to Rob Shepherd, a technical consultant with experience working for the likes of Royal Dutch Shell PLC and Ophir Energy PLC, becoming chief executive of Sefton - an idea that has now been quashed.
Sefton paid GBP500,000 into the joint venture company for that deal. On Friday, Sefton said any unspent funds, the amount of which was not disclosed, will be returned to the company next week but said it will only receive the spent funds if UTAS acquires a project in Indonesia.
The company said it will release further details about the UTAS deals and funding situation next week.
Moving forward, Sefton said Chambers and Hodges have identified "a number of oil and gas projects that they intend to pursue whether or not the company's common shares remain admitted to trading on AIM".
This upheaval of Sefton started after the company bowed to pressure from a group of shareholders in September.
Three shareholders, including former Interim Chairman Daniel Levi, requisitioned a meeting to remove the entire board of the company apart from Chairman Rachmantio and bring in Chambers and Hodges. However, that requisition was withdrawn once Sefton caved in.
Chambers and Hodges had a replacement lined up to replace Allenby, alleviating concerns for a short while, but on Monday, shareholders were dealt a blow when it said the prospective nominated adviser it intended to appoint to replace Allenby had pulled out.
In a separate statement later Friday, Sefton provided some positive news for shareholders. The company said the lawyers representing former executive chairman, Jim Ellerton, in the ongoing court case against the company has pulled out, leaving him searching for a new legal representative to pursue his case.
Ellerton lodged the original legal claim against the company, two directors and one former director in May, claiming damages related to his resignation from the company's board, the termination of his consulting contract, and a deal with Hawker Energy.
That was followed by Ellerton filing an involuntary petition under Chapter 7 of the US bankruptcy code to try to force the company into bankruptcy. Sefton had said Elletron was making the claims "in bad faith".
On Friday, Sefton said the lawyers representing Ellerton and associated companies have withdrawn their representation because "continued representation of the creditors will result in violation of the Rules of Professional Conduct or other law."
Sefton's legal representatives have said the litigation can not proceed unless Ellerton and associated parties can find a new representative.
Sefton shares were trading up 20% to 0.0300 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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