Insubordinate Fairstar Board Members Are About to Get FIRED
The board members at Fairstar Heavy Transport had better start polishing up their resumes because Dockwise is about to kick them all out on to the street.
Today, Dockwise announced that they had scheduled a hearing in Amsterdam court to request the “immediate suspension of the management of Fairstar Heavy Transport N.V., more in particular of the Chairmen of the Supervisory and Executive Boards.”
The court date is set for 26 July 2012.
Numerous issues prompted this action which was initiated to protect the interests of the Fairstar – Dockwise merger and all involved stakeholders. Dockwise commented today that they have, on various occasions, proposed that Fairstar cooperate on the details surrounding the final acquisition of Fairstar by Dockwise, particularly with respect to:
a recommendation by Fairstar management for an offer on the remaining almost 5% of Fairstar shares not yet owned by Dockwise;
information sharing on contracts, fleet completion and financing arrangements and other relevant matters;
confirmation of Dockwise commitments to Fairstar stakeholders including job security for Fairstar employees and contract security for Fairstar clients;
an exit arrangement for Fairstar management.
While Fairstar had, at some point in time, indicated it was willing to consider a recommendation, they were not willing to provide adequate information, dialogue was frustrated by Fairstar management and, proven by yesterday’s press release from Fairstar announcing the intention of the management of Fairstar to pursue a bond issue, the Supervisory Board appears to have lost control of Fairstar management. Fairstar management seems to continue to act contrary to the interest of Fairstar, the Fairstar – Dockwise combination and its shareholders and stakeholders, certainly in the current situation whereby Dockwise holds over 95% of the shares and a combination of the companies is imminent. Fairstar management further taking steps to build the fifth vessel without any discussion and reassessment in the context of the combination of the two companies is unacceptable.
Fairstar made yesterday’s announcement regarding the intended bond issue without the prior knowledge of its 95% shareholder Dockwise, while it had previously agreed not to issue bonds without the prior approval of Dockwise. In the meantime after yesterday’s press release and response thereto by Dockwise, Fairstar indicated again that it will not issue the bonds without the approval by Dockwise.
It is unlikely that Dockwise will approve the bond issue. As indicated on many occasions the intended bond issue appears value destructive and not the right financing option for Fairstar. Other financing options also need to be taken into account from the perspective of the Fairstar- Dockwise combination including the previous offer by Dockwise to support and underwrite between USD 50-100 mln of new equity for Fairstar, which was not considered or discussed by the boards of Fairstar. In addition to the offers by Dockwise to support the financing of Fairstar through an equity issue or other ways, Dockwise remains willing to buy the Fairstar bonds from bondholders, including those that may exercise their put option.
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