JKX shareholders vote to re-elect current management

A majority of JKX Oil & Gas (JKX LN) shareholders, or 52.2%, attending the company’s June 5 AGM voted to re-elect the company’s current management, JKX reported that day. Management succeeded in mobilizing 81.9% of shareholders, whose presence served to withstand the management removal attempt by dissenting shareholders, who controlled at least a 38.99% stake. Casting votes against management were those aligned with Eclairs Group and Glengary Overseas, firms which represent the interests of billionaires Igor Kolomoisky and Gennady Bogolyubov, who own many large assets in Ukraine. The dissenting shareholders gained a court order allowing them to attend and vote at the company’s AGM.

Recall that JKX attempted to prevent those aligned with Eclairs Group and Glengary Overseas, which hold 38.99% of total voting rights, from attending the AGM due to company’s alleged inability to determine the ownership structure and voting arrangements behind the two mentioned entities. Leading up to the AGM, Eclairs and Glengary sent a series of letters to JKX shareholders attempting to persuade them to vote against the re-election of top management.

Roman Dmytrenko: Now that JKX management has the support of a majority of its shareholders, we expect to see positive news flow from the company as management will likely try to justify their vote of confidence. We view these developments as positive: tight oversight by dissenting shareholders combined with management’s need to satisfy the expectations of the supporting shareholders create additional stimulus for JKX to improve its operating performance. At the same time, we do not expect the dissenters to give up so soon, considering they were outvoted by 6.3 mln ordinary shares, or just 3.6% of company’s total outstanding shares.