GREENWICH, CT, Nov. 11, 2013 /CNW/ - FrontFour Capital Group LLC
("FrontFour") announced its submission of a financing offer to the
board of Renegade Petroleum Ltd. ("Renegade", or the "Company")
("RPL-V; RPTTF-O"). FrontFour is concerned that the board of Renegade
may be considering a private placement at or below the current market
price. FrontFour believes that Renegade's shares trade at a
significant discount to net asset value; therefore, an equity financing
at or below current market prices would be excessively dilutive and a
breach of the board's fiduciary duties. FrontFour has delivered a
letter to the board of Renegade reminding them of their fiduciary
obligations to all shareholders and advising that FrontFour would be
willing, subject to mutual agreement as to terms and satisfactory
confirmatory due diligence, to backstop a significant financing at
prices above current levels.
On Wednesday, November 6th, the board of Renegade announced the addition of three (3) new board
members and called a special general meeting of shareholders. It is now
obvious that the current board prioritizes entrenchment and corporate
incest over accountability and good governance.
Addressing Conflicts with More Conflicts:
Instead of responding to the serious governance concerns raised by
FrontFour, the board of Renegade has decided to introduce new conflicts
of interest. As a result of the latest additions to Renegade's board,
half of the board of Toscana Energy Income Corporation ("Toscana") now
sits on the board of Renegade. Whose interests does this board
represent? The Chairman seems to be hand-picking directors from his
bench of relationships, which in our view seems likely designed to
ensure control and protection from the shareholders who he is supposed
to serve as a fiduciary.
Mr. Donald Copeland serves on the board of Toscana with Thomas Budd. Mr.
Joseph Durante is an officer of Toscana and part of the management team
that reports directly to Thomas Budd. How can anyone expect
independence from a director whose performance and compensation is in
part evaluated by Thomas Budd and Donald Copeland in another corporate
context? One can only conclude that this was the result of desperation
and a lack of viable director candidates given the track record of the
current board. In addition to the Toscana conflicts, the third recently
added board member, Mr. Peter Burnham, is currently employed by
existing board member Mr. Herb Pinder's private company Goal Group,
where Mr. Pinder is a principal.
Prior to FrontFour's engagement with the Company, the board had eight
(8) members including the CEO who has since departed. The board now
has nine (9) directors and has supposedly commenced a search for a new
CEO, which if added to the board would increase the director count to
ten (10). FrontFour believes that, in addition to other deficiencies,
the current board is too large and unnecessarily expensive. Given the
new conflicts that have been willingly introduced, it is hard to
believe that a larger board will help break the chain of serial
mistakes made by the Company. FrontFour recently reviewed the SEDI
filings for the three (3) new directors and were not surprised to find
out that they own no shares of Renegade. This is consistent with the
current board's corporate values.
Commenting on the board's recent actions, FrontFour co-founder Zachary
George stated, "While we have always been open to an amicable
resolution to restore Renegade's credibility, this appears less likely
with each day. We welcome the opportunity for shareholders to hold the
board accountable at the upcoming special meeting of shareholders."
About FrontFour Capital Group LLC:
Founded in 2006, FrontFour is an investment management company with
offices in Greenwich, Connecticut and Toronto, Ontario.
The TSX Venture Exchange has not reviewed nor approved the contents of
this press release and does not accept responsibility for the adequacy
or accuracy of this press release. This news release is not a
solicitation of a proxy.
SOURCE: FrontFour Capital Group LLC
For further information:
Tel: (203) 274-9053