Former Clyde directors return with rescue deal for Pittencrieff

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The Independent Online
The former top management of Clyde Petroleum, which lost control after the closely fought pounds 495m takeover bid by Gulf Canada earlier this year, returned to the oil business yesterday with a deal to rescue Pittencrieff Resources, the troubled exploration and production company.

The four ex-Clyde executives, including Malcolm Gourlay and Roy Franklin, former chairman and group managing director, said they planned to use Pittencrieff to create a "new Clyde," aiming to triple the company's value to up to pounds 150m in two years.

"We've had a nice summer improving our golf handicaps and now it's time to get back to business," Mr Franklin said. If the new management fulfils its target, it will receive up to 1 million shares through a three-year incentive scheme.

It also emerged yesterday that Terry Heneaghan, Pittencrieff's former chief executive who resigned in June, walked away with a pounds 450,000 pay- off, despite the company's financial problems. His three-year rolling contract, with a pounds 150,000 basic annual salary, was in stark contrast to the Greenbury proposals on executive pay, which recommended contracts of no more than two years.

Another two Pittencrieff directors resigned yesterday, Michael Munro, chairman, and Gerald Hobson, a non-executive director. John Brown, the finance director, is to stay on.

Pittencrieff's leading City investors, Scottish Value Management and Mercury Asset Management, which speak for some 30 per cent of the shares, had backed the changes after the company failed to find a buyer.

With Clyde's former broker, Hoare Govett, the new management yesterday raised pounds 1.7m of new cash through the placing of 2.9 million new shares at 60.3p. The share price ended 6p higher, at 62.5p. Pittencrieff's biggest shareholder, the US arbitrage fund Liverpool Ltd Partnership and Westgate International, sold its 28.6 per cent stake at 60p.

"The funds are enough to cover two years of looking for acquisition opportunities. The institutions understand that for the right deal we'll be coming back to them for more equity," said Mr Franklin.