Stanmore Coal’s largest shareholder, Golden Investments, has requested an extraordinary general meeting (EGM) in an attempt to remove the company’s chief executive and chairman.
The request follows an unsuccessful $240 million takeover bid that Golden Investments made for Stanmore in November last year.
A tussle over the ownership has ensued, with Golden Investments now requesting that chair Stewart Butel and managing director Dan Clifford be removed as directors of the company.
The major shareholder is also pursuing the election of Cameron Vorias as an independent non-executive director and chairman, and Jimmy Sen Ming Lim as a non-executive director.
Discussions regarding Stanmore’s board composition have been ongoing since Golden Investments’ unsuccessful takeover bid expired in February this year.
The investment company reportedly requested the appointment of two nominees to Stanmore’s board, agreeing to appoint Lim while also aiming to recruit an additional non-executive director, subsequently appointing Darren Yeates.
Stanmore reported that Golden Investments has not taken up the offer to appoint Lim to the board, which was reoffered again on July 26 alongside the appointment of Vorias, subject to terms and protocol.
This took place after Stanmore received the request for an extraordinary general meeting, as part of its effort “to protect all shareholders from the consequences of a public fight over the company’s board composition.”
Stanmore has reported that Golden Investments rejected the board’s offer on the same day and declined a request for an urgent meeting to discuss the matter.
In response to the demands made by Golden Investments, Stanmore stated that “the board does not intend to act on these further proposals and notes that they are clearly designed to offer Golden Investments control.”
The company added: “The board of Stanmore Coal believes that Golden Investments is attempting to obtain effective control of the company without paying other shareholders a control premium, by seeking to remove and replace the company’s current chair and managing director with their nominees.”
If Golden Investments secures shareholders support for its resolutions and further proposals, it will achieve effective control of the board and therefore, the company, despite the fact it has a total holding of just 25.89 per cent.
In its notice, Golden Investments claims it has lost confidence in Stanmore’s board, with Stanmore commenting that it “is very surprised to hear this.”
The coal producer stated that following the release of the 2019 financial year results, which included record levels of coal production, coal sales, revenue and earnings, Golden Investments congratulated management in writing on the company’s performance.
As such, Stanmore has claimed “there is no reasonable basis for concluding that the current chair and managing director have underperformed in their roles.”
It went on to say: “The board is not convinced that Golden Investments’ concerns about the board’s performance are genuine. The board considers that the attempt by Golden Investments to remove key members of the company’s successful board and management team is likely to have a negative impact on the company’s share price, customer relationships and employee morale.”
Butel commented that “after a failed bid that undervalued Stanmore, Golden Investments is trying to take effective control of the company, this time without paying any premium to their fellow shareholders.”
“The board and management team of Stanmore are confident of the performance and prospects of the business. We will convene the EGM to resolve the situation and give all shareholders certainty about the future of their company.”
An EGM will be held in September, with details of the resolutions and recommendations of the board to be provided to shareholders in due course.