GREENSBORO, NC / ACCESSWIRE / October 27, 2023 / VN Capital Management LLC ("VN Capital"), an investment advisor to a fund holding approximately 5.6% of the issued and outstanding common shares (the "Common Shares") of High Arctic Energy Services Inc. ("High Arctic" or the "Company"), has called for a special meeting of the shareholders of High Arctic to remove High Arctic's Chairman of the Board, Michael Binnion.
As announced on May 11, 2023 and further detailed in a press release dated August 3, 2023, the Board of Directors of High Arctic (the "Board") intended to pursue a reorganization pursuant to which, among other things, High Arctic's Papua New Guinea ("PNG") business would be spun off as a private company to existing shareholders who elect to participate (the "Proposed Spinoff"). In the opinion of VN Capital, the Proposed Spinoff was structured in a way that could have seen Cyrus Capital Partners, L.P. ("Cyrus"), the investment manager of certain funds that indirectly hold 45% of the Common Shares, purchase the crown jewel of High Arctic for pennies on the dollar without providing minority shareholders customary and appropriate protections for a related party transaction.
VN Capital shared its concerns regarding the Proposed Spinoff with Mr. Binnion and the CEO of High Arctic, Mike Maguire, and has gone public with its objections. VN Capital has received very strong support from several other shareholders who share VN Capital's concerns. Although the Company has since announced that it has abandoned the Proposed Spinoff and is working on a new proposed reorganization of the Company, VN Capital and other minority shareholders share concerns that the Board is unlikely to devise a transaction that is in the best interests of all shareholders.
"The Company should simply sell the PNG business to Cyrus or another third party in an arms-length transaction. If the valuation a buyer is willing to pay isn't acceptable to minority shareholders, then the Company should simply wait until the PNG drilling market recovers," said James Vanasek, Principal at VN Capital.
"Unfortunately, our efforts to work cooperatively with Mr. Binnion to come up with an equitable structure have not been welcomed and we have lost confidence in Mr. Binnion's ability and willingness to negotiate a new structure that maximizes High Arctic's value and adequately addresses the concerns of minority shareholders," added Don Noone, also Principal at VN Capital.
"Therefore, we have reluctantly taken the step of requisitioning a special shareholder meeting to remove Mr. Binnion from the Board. We also hope that, because of our action, the other High Arctic directors - Simon Batcup, The Honourable Joe Oliver, and Douglas Strong - will consider their fiduciary duties owed towards all High Arctic shareholders," said Mr. Noone.
About VN Capital
VN Capital Management, LLC is a registered investment advisory firm located in New York, New York that was founded in 2002 by P. Donnell Noone and James T. Vanasek. The firm manages a hedge fund that holds a concentrated portfolio of small-cap equities.
About High Arctic
High Arctic is an energy services provider. High Arctic is a market leader in Papua New Guinea providing drilling and specialized well completion services and supplies rental equipment including rig matting, camps, material handling and drilling support equipment. In western Canada, High Arctic provides pressure control equipment on a rental basis to exploration and production companies.
FOR FURTHER INFORMATION PLEASE CONTACT:
VN Capital Management, LLC
Don Noone
(336) 897-1615
pdn@vncapital.net
SOURCE: VN Capital Management
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