Trico Marine Services – Kistefos

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Kistefos Informs Trico It Will Vote against Company’s 2010 Board Nominees – citing Board’s Unwillingness to Remove Chairman and CEO Compofelice, Kistefos Takes Action to Change the Board and Reverse Trico’s Continued Destruction of Shareholder Value

Trico Marine Services – Kistefos

Vi siterer pressemelding fra Businesswire:

Kistefos Informs Trico It Will Vote against Company’s 2010 Board Nominees – citing Board’s Unwillingness to Remove Chairman and CEO Compofelice, Kistefos Takes Action to Change the Board and Reverse Trico’s Continued Destruction of Shareholder Value

Kistefos AS, the largest stockholder of Trico Marine Services, Inc. sent a letter to Trico Lead Director Richard A. Bachmann today advising the Board that it intends to vote its 3,535,959 shares against the company’s three incumbent directors up for election at Trico’s 2010 Annual Meeting. Kistefos said it also intends to vote against Trico’s proposals to adopt an incentive plan, authorize additional shares of common stock and stagger and delay declassifying the Board.

“Growth in the subsea services market for the foreseeable short and long-term future, I believe, is significant and sustainable.”

In the letter to Mr. Bachmann, Kistefos Chairman Christen Sveaas said the decision to vote against the three directors – Edward C. Hutcheson, Jr., Myles W. Scoggins and Per Staehr – is a direct result of Kistefos having lost all confidence in Trico Chairman and CEO Joseph Compofelice.

Kistefos had expressly called on the Board last October to remove Mr. Compofelice from his executive positions, citing the overwhelming loss of stockholder value and enormous financial losses that have occurred on his watch. Given the Board’s continuing refusal to respond to the concerns of the stockholders and its continuing support for Mr. Compofelice and his failed strategy, Kistefos said it was left with no choice other than to vote for change in the Board’s composition. Kistefos said that it believes that much of the crisis which exists today could have been avoided had the Board listened to the stockholders last year when it had the opportunity.

Kistefos believes that removing Mr. Compofelice now is critical to restoring Trico’s credibility among its constituents and saving the company. In its letter, Kistefos cited the following examples of Trico’s poor performance and extraordinary destruction of shareholder value since Mr. Compofelice’s appointment as CEO on July 9, 2007:

  • Trico has suffered a devastating 96% drop in share price from a high of over $42 per share in June, 2007 to $1.63 per share on May 7, 2010, resulting in the destruction of over $600 million in market value. That includes a 53% stock price drop since last year’s Annual Meeting, an unmistakable vote of “no confidence” in current management in Kistefos’ opinion.
  • Trico has ranked at the bottom of its peer group for the last two years in nearly every important metric, including profit margin, return on equity and total shareholder return.
  • As a result of two ill-timed, misguided and reckless acquisitions, Trico incurred more than $1 billion in debt in 2008, resulting in total indebtedness of more than ten times its then anticipated 2008 EBITDA. The consequences of such deliberate overleveraging have been, in Kistefos’ opinion, devastating to the company.
  • Furthermore, in 2008 and 2009 Trico reported operating losses of $128 million and $125 million, respectively, none of which were foreseen by Trico at the time of the DeepOcean acquisition.
  • Trico has reported that it has insufficient cash to make required principal payments under its loan agreements later this year and that it does not expect to be in compliance with certain debt covenants under its loan agreements.
  • The company’s liquidity crisis is so acute that it has been forced to sell vessels at fire sale prices, further weakening the company.

In the letter, Kistefos also said it will vote against Trico’s proposals to adopt an incentive plan, to authorize additional shares of common stock and to stagger and delay declassifying the Board. It said that until the Board removes Mr. Compofelice, installs fresh management and develops a coherent strategy to resolve the crisis it is in, Kistefos simply cannot vote for plans to further compensate management or to authorize additional shares of common stock. In addition, while it is strongly in favor of declassifying the Board, it cannot support Trico’s proposal to do so gradually over a four year period.

THIS IS NOT, NOR SHALL IT BE DEEMED TO BE, A SOLICITATION OF PROXIES FOR THE COMPANY’S UPCOMING ANNUAL MEETING.

DEL