DGAP-News: Octavian Advisors: Octavian calls for Extraordinary General Meeting at Balda AG to replace the current Supervisory Board
(firmenpresse) - DGAP-News: Octavian Advisors / Key word(s): Legal Matter
Octavian Advisors: Octavian calls for Extraordinary General Meeting at
Balda AG to replace the current Supervisory Board
12.12.2011 / 15:32
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Press Release
Octavian calls for Extraordinary General Meeting at Balda AG to replace the
current Supervisory Board
- Serious concerns about the independence of Balda AG's Supervisory Board
- Due to apparent conflict of interest, Octavian believes that
Supervisory Board has repeatedly acted against the best interest of
Balda and its shareholders
- Octavian aims to elect a Supervisory Board free of conflicts that will
contribute to unlocking Balda's value
New York, December 12th 2011 - Octavian Advisors LP, which, through various
funds, owns approximately 8.3% of the outstanding shares of Balda AG
('Balda'), announced today that it has filed a request for an Extraordinary
General Meeting with the Management Board of Balda, with the aim of
replacing the current Supervisory Board.
'This board has cost shareholders EUR 350 million. It is apparent that, due
to a conflict of interest, Balda's Supervisory Board has not acted in the
best interest of Balda and its shareholders. It appears that Supervisory
Board decisions benefited individuals rather than the company and all of
its shareholders. This view is also widely shared among analysts and other
members of the financial community that follow the company.' said Richard
Hurowitz, Chairman and Chief Executive Officer of Octavian.
Two of the three members of the Supervisory Board, Mr. Yu-Sheng Kai and Mr.
Chun-Chen Chen, are closely related to Balda's biggest single shareholder,
Michael Chiang, as both are employed in companies that are part of Chiang's
group. In addition, both were nominated by Michael Chiang's investment firm
Yield Return Investment.
Michael Chiang holds a 27.6% stake in Balda worth approximately EUR 50
Million through Yield Return Investment. The conflict of interest arises as
he is also co-founder and Chairman of TPK Holding Co., Ltd ('TPK'), in
which he and his wife hold a 25% stake worth approximately EUR 500 Million.
As a remnant of an earlier joint venture, Balda in turn holds a 16.1% stake
in TPK. At current market levels, this 16.1% stake alone is worth
approximately 1.7 times Balda's market capitalisation.
Several decisions made by the Supervisory Board have been to the
significant detriment of Balda and its general shareholders, with the
exception of Mr and Mrs Chiang and TPK, who have benefited from them.
One recent example of this conflict of interest is the management's
announcement, at the AGM in May 2011 and in the presence of the Supervisory
Board, that the stake in TPK was considered non-core and would be sold by
the end of October 2011 at the latest after the lock-up period expired.
However, by never approving such sale, the Supervisory Board indirectly
blocked this move. As a result, Balda shareholders were deprived of EUR 350
Million in value by the decrease of the TPK share price. At the time, the
TPK stake was worth four times Balda's current market capitalization.
The fact that the Supervisory Board agreed instead to extend the lock-up
period for the TPK stake, with no benefit to Balda, at a time when the
stake had more than EUR 790 million in value, is another example of this
conflict. The extension solely helped Mr and Mrs Chiang and the other TPK
shareholders to raise capital in April 2011.
Furthermore, in October 2008 Balda sold a 12% stake in TPK to Michael
Chiang. While the exact terms were not disclosed, it appears that the
shares were sold for not more than 20 Taiwanese Dollar (TWD) per share.
When TPK went public two years later, the offer price was at TWD 220 and
the shares closed at TWD 480 on the first day of trading and hence at a
significantly higher price than the price paid by Michael Chiang.
'In my view, circumstances indicate that Balda's Supervisory Board has
clearly acted in favour of Mr and Mrs Chiang and other investors in TPK,
rather than in the best interest of Balda and all its shareholders. As the
Supervisory Board is likely to continue acting against the best interest of
the Company, it is imperative that its members are replaced as soon as
possible.' said Igor Kuzniar, Managing Director at Octavian.
In order to improve governance at the Supervisory Board level, Octavian
seeks to replace the current Supervisory board and will nominate the
following managers to be elected at the Extraordinary General Meeting:
- RenéCharles Jäggi (Nomination as Chairman); has more than 35 years of
management experience, currently as the Chairman of publicly listed
Röder Zeltsysteme&Service AG in Büdingen. He is also Delegate of the
Board of publicly listed OpenLimit SignCubes AG in Baar as well as
Member of the Board of MCH Messe Schweiz AG in Basel. Before that, Mr.
Jäggi was CEO of Adidas (1986-1992).
- Behdad Alizadeh, Partner of Pardus Capital Management; has more than 20
years of experience in the financial services industry on both sides of
the Atlantic and possesses significant international board experience.
Mr. Alizadeh served on the boards of Atos and Valeo from 2008 to 2010
and was instrumental in reforming corporate governance at both
companies.
- Igor Kuzniar, Managing Director of Octavian Advisors LP; has more than
10 years of experience in corporate finance, strategy and investment
management. The former McKinsey consultant holds an MBA from Harvard
Business School.
Contact
For German media
CNC - Communications&Network Consulting
Lasse SchmidT +49 89 599 458 142E Nicholas WenzelT +89 599 458 115EFor International media
Lasse.Schmid(at)cnc-communications.com Nicholas.Wenzel(at)cnc-
communications.com
Sard Verbinnen&Co
Jonathan Doorley
001 212.687.8080
JDoorley(at)sardverb.com
About Octavian Advisors
Octavian Advisors, LP is a global investment firm with offices in New York
and London. The firm focuses on special situations and distressed
investments in international markets, and has successfully invested in over
40 countries on six continents. Octavian currently manages $1 billion for
leading endowments, foundations, pension funds, family offices and
institutions.
End of financial news
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