Egypt: Israeli assets in energy company sparks boardroom crisis

Britain’s Capricorn Energy Company which manages natural gas and oil assets in Egypt plans to dismiss seven of its executives who reject a takeover deal by Israel’s NewMed Energy, Reuters has reported. The proposed merger would see a new company operating in the Egyptian and Israeli natural gas fields, amid efforts by Cairo and Tel Aviv to reserve a share of exports for energy-hungry Europe.

One of the largest shareholders in Capricorn Energy, Palliser Capital, has called for a general meeting to discuss the dismissal of seven members of the executive management, including the CEO Simon Thompson and CFO James Smith. Shareholders with more than 40 per cent of Capricorn’s shares oppose the planned merger because it devalues the company and is “unnecessarily biased towards NewMed”.

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Palliser Capital pointed out that it had confirmations from shareholders controlling another 28 per cent of Capricorn who have “lost trust in the current board of directors”.

NewMed Energy seeks to be the first Israeli company to own gas and oil assets in Egypt. It has signed an agreement to acquire 90 per cent of the shares of Capricorn Energy. According to a statement issued in late September, it is expected that the shareholders of NewMed Energy (the former Delek Drilling Company) will pay $620 million to the shareholders of Capricorn Energy.

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