Report
Expert Corporate Governance Service (ECGS)
EUR 500.00 For Business Accounts Only

Lundin Petroleum, 31 July 2019

In general, Lundin Petroleum is in compliance with the Swedish regulations relating to the organisation and procedures of the Extraordinary General Meeting.

Under ITEMS7a-c and 8

approval is sought of a share swap transaction with Norway-based Equinor ASA. In ECGS view, the board of directors of Lundin Petroleum takes an advance on the Company’s future by increasing the level of indebtedness (by 15% up to approximately USD 3.9 billion proforma after the transaction) in exchange for (at this time) uncertain benefits (oil prices ever fluctuate, and production of the Johan Sverdrup field has not started yet). Accordingly, the Company can better use (potential) excess cash to reduce the amount of (net) debt first and thereby strengthen its balance sheet instead of repurchasing own shares through a share swap transaction. Furthermore, the transaction would increase the control of the μLundin family in the Company from 28.7% to 34.2% to the detriment of minority shareholders' voting rights. In view of the above concerns, ECGS recommends to vote OPPOSE.

Underlying
Lundin Petroleum AB

Lundin Petroleum is an oil and gas company. Co. has a global portfolio of assets with two main areas located in Norway and South East Asia. As of Dec 31 2014, Co. held close to 70 licences in Norway, with activities across exploration, appraisal, development and production. Co. also operated within several geographical areas, including France, Netherlands, Malaysia, Indonesia, Russia, Sweden and other countries.

Provider
Proxinvest
Proxinvest

Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

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Expert Corporate Governance Service (ECGS)

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