First Calgary's richard anderson under pressure to resign

First Calgary's Richard Anderson Under Pressure to Resign

04-09-2008

The Russian-British plasma physicist rattling Canada's oilpatch with a fierce battle against First Calgary Petroleums Ltd. said he's willing to work out a compromise, but the company's CEO, Rick Anderson, has to go.

Michael Kroupeev, 42, leader of an international shareholders' revolt against the poorly performing company, said he's in discussions with First Calgary's chairman, Garfield Emerson, about proposing a joint slate of directors to replace the current board. The new slate would include nominees from both the dissident group and the company. "There could be a deal, but the deal would see Rick Anderson going, the board to be substituted and new people coming in," he said in an interview. "It's up to the chair whether he can deliver a deal. Trying to negotiate with Rick Anderson is very difficult because there are a lot of hurt feelings."

Mr. Kroupeev, who manages investments worth $1.5-billion from his London base and personally holds 9.4% of First Calgary's stock through Waterford Finance & Investment Ltd., flew to Calgary Monday night to address First Calgary's meeting of shareholders, originally scheduled for Tuesday, at which the dissidents were poised to take control of the company.

But the meeting was postponed on Monday evening until April 18 by Alberta Court of Queen's Bench Justice Bruce McDonald. Siding with company lawyers, Mr. McDonald said shareholders needed more time to consider a letter written on the weekend by Algeria's energy minister. First Calgary's only asset is a $1.3-billion natural gas project in Algeria that is 30 months away from first production. In the letter, Chakib Khelil said he would look negatively upon any changes to the company's management team. "I am deeply concerned about the recent public developments and proposed board changes at FCP, in particular the removal of [CEO Richard] Anderson," Mr. Khelil, who is also the president of OPEC, wrote.

Jeff Angel, spokesman for First Calgary, said the company remains open to discussions to enhance shareholders value, but declined to say whether negotiations for a compromise are under way. The company disagrees that the dissidents have the support of shareholders with 55% of the stock, he said. "That's not how we see it," he said. "We think this is going to be a close vote."

First Calgary will communicate "vigorously" with shareholders until next week's meeting to ensure they understand the implications of the Algerian minister's letter. Mr. Anderson is scheduled to meet with Mr. Khelil in Algiers on Saturday, he said. Mr. Kroupeev said dissident shareholders controlling 55% of the stock are sophisticated investors who will not change their views.

A dual citizen of Russia and the U.K. who lives in London, travels frequently to Russia, and holds an MBA from the London School of Economics in addition to his physics degree, Mr. Kroupeev said he owns or manages shares on behalf of partners in projects in ten countries, mostly emerging markets. "I will probably wait for next week and I will come back and take it from there," he said. He called First Calgary's 11th-hour legal showdown "pathetic."

"You have 55% of votes in favour [of change]. With a view that only 80% are going to vote, it's a landslide [for the dissidents]. Just go away. Where is your pride? Where is your integrity?"

In a news release, Waterford said the delay would simply add up to more costs for shareholders. It estimates First Calgary spent $650,000 on public relations and advertising and another $600,000 to hire two investment banks to defend itself against the dissident group.

Mr. Kroupeev is a partner of Yuri Shafranic, another dissident shareholder and a member of First Calgary's board of directors. Mr. Shafranic served as Russia's oil minister from 1993 to 1996 under Boris Yeltsin. The two were part of a group of investors, many of them Russian, who took a position in First Calgary in 2001, when it was a shell with no assets.